Karat Packaging Inc
NASDAQ:KRT
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.
Record Sales: Karat Packaging reported record Q3 net sales of $124.5 million, up 10.4% year-over-year, driven by strong volume growth and favorable product mix.
Margin Pressure: Gross margin fell to 34.5% from 38.6% a year ago, primarily due to significantly higher import costs caused by increased duties and tariffs.
Paper Bag Growth: The company secured a major paper bag contract expected to contribute $20 million annually, with ambitions to scale this new business category to over $100 million in annual sales within 2–3 years.
Shareholder Returns: Karat announced its first-ever $15 million share repurchase program in addition to maintaining its regular $0.45 per share quarterly dividend.
Outlook: Management guided for Q4 net sales growth of 10% to 14% year-over-year, with gross margin expected between 33% and 35%, and adjusted EBITDA margin of 8% to 10%.
