--- title: "Karat Packaging | 8-K: FY2026 Q2 Revenue Beats Estimate at USD 136.3 M" type: "News" locale: "en" url: "https://longbridge.com/en/news/295149799.md" datetime: "2026-08-06T21:56:47.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/295149799.md) - [en](https://longbridge.com/en/news/295149799.md) - [zh-HK](https://longbridge.com/zh-HK/news/295149799.md) generator: "portal-rs" --- # Karat Packaging | 8-K: FY2026 Q2 Revenue Beats Estimate at USD 136.3 M Revenue: As of FY2026 Q2, the actual value is USD 136.3 M, beating the estimate of USD 135.46 M. EPS: As of FY2026 Q2, the actual value is USD 1.46, beating the estimate of USD 0.47. EBIT: As of FY2026 Q2, the actual value is USD 38.29 M. ### Second Quarter 2026 Financial Highlights (Three Months Ended June 30, 2026 vs. 2025) #### Operational Metrics - **Net Sales**: Karat Packaging Inc. reported record quarterly net sales of $136.3 million, an increase of 9.9% from $124.0 million in the prior-year quarter. This increase was primarily driven by $13.1 million in volume growth and product mix, and a $0.4 million favorable year-over-year pricing comparison, partially offset by a $1.1 million decrease in shipping and logistics revenue. - **Cost of Goods Sold**: Cost of goods sold decreased by 21.0% to $59.1 million from $74.9 million in the prior-year quarter, primarily due to $25.8 million in IEEPA tariff refunds. - **Gross Profit**: Gross profit increased to $77.2 million, including $25.8 million from IEEPA tariff refunds, up 57.1% from $49.1 million in the prior-year quarter. - **Gross Margin**: Gross margin was 56.6%, including a 1,890 basis points contribution from IEEPA tariff refunds, compared with 39.6% in the prior-year quarter. - **Operating Expenses**: Operating expenses increased to $39.6 million from $32.6 million in the prior-year quarter, mainly due to higher shipping and transportation costs ($3.1 million), online platform fees ($0.6 million), marketing expense ($0.5 million), salaries and benefits ($1.1 million), bad debt expense ($0.6 million), and warehouse expense ($0.4 million). - **Operating Income**: Operating income was $37.6 million, compared to $16.6 million in the prior-year quarter. - **Other Income, Net**: Other income, net was $1.4 million, compared with other expenses, net, of -$2.0 million in the prior-year quarter. - **Net Income**: Net income increased by 168.3% to $29.6 million, including $20.2 million from IEEPA tariff refunds, from $11.1 million in the prior-year quarter. - **Net Income Margin**: Net income margin was 21.8%, including a 1,480 basis points contribution from IEEPA tariff refunds, versus 8.9% in the prior-year quarter. - **Adjusted EBITDA**: Adjusted EBITDA was $41.6 million, including $25.8 million from IEEPA tariff refunds, compared with $17.7 million for the prior-year quarter. - **Adjusted EBITDA Margin**: Adjusted EBITDA margin was 30.5% of net sales, including a 1,890 basis points contribution from IEEPA tariff refunds, compared with 14.3% for the prior-year quarter. #### Segment Revenue - **Chains and distributors**: $105.9 million in 2026 compared to $97.2 million in 2025. - **Online**: $25.8 million in 2026 compared to $20.9 million in 2025, representing 23.6% growth over the prior-year quarter. - **Retail**: $4.5 million in 2026 compared to $5.9 million in 2025. ### Six-Month 2026 Financial Highlights (Six Months Ended June 30, 2026 vs. 2025) #### Operational Metrics - **Net Sales**: Net sales increased by 11.3% to $253.2 million from $227.6 million in the same period last year. - **Cost of Goods Sold**: Cost of goods sold decreased by 2.3% to $134.6 million from $137.7 million, primarily due to $25.8 million in IEEPA tariff refunds. - **Gross Profit**: Gross profit increased by 32.1% to $118.7 million, including $25.8 million from IEEPA tariff refunds, from $89.9 million in the same period last year. - **Gross Margin**: Gross margin was 46.9%, including a 1,020 basis points contribution from IEEPA tariff refunds, compared with 39.5% in the same period last year. - **Operating Expenses**: Operating expenses were $72.6 million, compared with $65.5 million in the same period last year, driven by higher shipping and transportation costs, salaries and benefits, bad debt expense, warehouse expense, and marketing expenses. - **Other Income, Net**: Other income, net was $2.3 million, compared with other expenses, net, of -$0.9 million in the same period last year. - **Net Income**: Net income increased by 105.9% to $36.8 million, including $20.2 million from IEEPA tariff refunds, from $17.9 million in the same period last year. - **Net Income Margin**: Net income margin was 14.5%, including an 800 basis points contribution from IEEPA tariff refunds, compared with 7.8% in the same period of 2025. - **Adjusted EBITDA**: Adjusted EBITDA was $54.1 million, including $25.8 million from IEEPA tariff refunds, compared with $29.6 million in the same period last year. - **Adjusted EBITDA Margin**: Adjusted EBITDA margin was 21.4%, including a 1,020 basis points contribution from IEEPA tariff refunds, compared with 13.0% in the same period of 2025. #### Segment Revenue - **Chains and distributors**: $198.8 million in 2026 compared to $177.8 million in 2025. - **Online**: $45.3 million in 2026 compared to $38.7 million in 2025. - **Retail**: $9.1 million in 2026 compared to $11.1 million in 2025. #### Cash Flow - **Net Cash Provided by Operating Activities**: $40.3 million, including $25.2 million from IEEPA tariff refunds, compared to $17.5 million in the prior-year period. - **Net Cash Used in Investing Activities**: -$18.3 million compared to $1.2 million provided by investing activities in the prior-year period. - **Net Cash Used in Financing Activities**: -$21.6 million compared to -$19.7 million in the prior-year period. - **Free Cash Flow**: $38.1 million compared to $16.2 million in the prior-year period. #### Unique Metrics - **Dividend**: Karat Packaging Inc.’s Board of Directors approved an increase in its regular quarterly dividend to $0.47 per share. - **Share Repurchase Program**: During Q2 2026, Karat Packaging Inc. repurchased 73,510 shares for approximately $2.0 million, with $10.0 million remaining available under the program as of June 30, 2026. ### Outlook / Guidance Karat Packaging Inc. expects net sales for the third quarter and full-year 2026 to increase by low double-digits from the prior-year periods. The company projects a gross margin of 35% to 37% for Q3 2026 and in the low 40 percents for full-year 2026, and an Adjusted EBITDA margin of 9% to 11% for Q3 2026 and approximately mid-teens for full-year 2026. These projections include the impact of IEEPA tariff refunds recorded in the first half of 2026 where applicable. ### Related Stocks - [KRT.US](https://longbridge.com/en/quote/KRT.US.md) ## Related News & Research - [Karat Packaging VP-Manufacturing Marvin Cheng reports disposal of 4,500 common shares worth $212,985](https://longbridge.com/en/news/296661733.md) - [Wall Street's Most Accurate Analysts Weigh In On 3 Industrials Stocks With Over 3% Dividend Yields](https://longbridge.com/en/news/295661242.md) - [Law Offices of Howard G. Smith Announces Investigation of Karat Packaging Inc. 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