Karat Packaging Inc
NASDAQ:KRT
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Karat Packaging Inc
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Karat Packaging Inc
Karat Packaging, Inc. manufactures and distributes disposable products for the restaurants and foodservice industry. The company is headquartered in Chino, California and currently employs 680 full-time employees. The company went IPO on 2019-10-16. The firm supplies a range of products for the foodservice industry, including food and take-out containers, bags, tableware, cups, lids, cutlery, straws, specialty beverage ingredients, equipment, gloves and other products. Its products are available in plastic, paper, biopolymer-based and other compostable forms. Its Karat Earth line includes food containers, tableware, cups, lids, utensils and straws. The firm offers customized solutions to its customers, including new product development, design, printing and logistics services. The firm's customers include a variety of national and regional distributors, restaurant chains, retail establishments and online customers. Its customers can order and schedule delivery of products via telephone, facsimile, email or through its online e-commerce platform at www.lollicupstore.com.
Karat Packaging, Inc. manufactures and distributes disposable products for the restaurants and foodservice industry. The company is headquartered in Chino, California and currently employs 680 full-time employees. The company went IPO on 2019-10-16. The firm supplies a range of products for the foodservice industry, including food and take-out containers, bags, tableware, cups, lids, cutlery, straws, specialty beverage ingredients, equipment, gloves and other products. Its products are available in plastic, paper, biopolymer-based and other compostable forms. Its Karat Earth line includes food containers, tableware, cups, lids, utensils and straws. The firm offers customized solutions to its customers, including new product development, design, printing and logistics services. The firm's customers include a variety of national and regional distributors, restaurant chains, retail establishments and online customers. Its customers can order and schedule delivery of products via telephone, facsimile, email or through its online e-commerce platform at www.lollicupstore.com.
Revenue: Net sales were $115.6 million in Q4 2025, up 13.7% year-over-year driven by double-digit volume growth and positive pricing.
Margins: Q4 gross margin was 34.0%, down from 39.2% a year ago due to higher import costs (tariffs, duties, ocean freight), but management expects margin tailwinds beginning in Q2 2026.
Profitability: Net income was $7.2 million in Q4, up 22.8% YoY; net income attributable to Karat was $6.8 million or $0.34 diluted EPS, up from $0.28.
Cash flow & balance sheet: Operating cash flow was $15.4 million and free cash flow was $14.6 million in Q4; ended 2025 with $91.0 million working capital and $45.6 million liquidity.
Growth drivers: Paper bag and eco-friendly products gaining momentum (eco products 37.3% of revenue in Q4 2025), pipeline of new chain-account opportunities could provide upside to guidance.
Capital return: Regular quarterly dividend of $0.45 per share; repurchased 137,374 shares for $3.0 million with ~$12.0 million remaining authorization as of March 11, 2026.
2026 outlook: Q1 2026 net sales growth expected ~8%–10%; Q1 gross margin expected 34%–36% and adjusted EBITDA margin 9%–11%; full-year 2026 net sales expected to grow in the low double-digit range with margin improvement YoY.
