Brief: Karat Packaging Q2 Adjusted EPS USD 0.57

Karat Packaging

07/08/2025 21:05

Overview

Karat Q2 net sales rise 10.1% to $124 mln, beating analyst expectations, per LSEG data

Adjusted EPS, net income, and adjusted EBITDA missed analyst estimates

Co navigated tariff uncertainty with alternative sourcing, enhancing supply chain resilience

Outlook

Karat expects Q3 net sales to rise high single-digit to low double-digits

Company anticipates Q3 gross margin in low to mid-30s

Adjusted EBITDA margin for Q3 expected between 10% and 12%

Maintains full-year guidance, pending tariff impact

Result Drivers

ALTERNATIVE SOURCING - Co successfully navigated tariff uncertainty by diversifying sourcing, reducing reliance on China to 10%, per CEO Alan Yu

VOLUME AND PRODUCT MIX - Increase in net sales driven by $14.2 mln rise in volume and change in product mix, partially offset by $3.3 mln unfavorable pricing

CURRENCY HEADWINDS - Despite foreign currency losses due to USD weakening against New Taiwan Dollar, co delivered record net sales and net income

Key Details

Metric
Beat/Miss
Actual
Consensus Estimate
Q2 Sales
Beat
$124 mln
$123.50 mln (2 Analysts)
Q2 Adjusted EPS
Miss
$0.57
$0.6 (1 Analyst)
Q2 Net Income
Miss
$11.10 mln
$12 mln (1 Analyst)
Q2 Adjusted EBITDA
Miss
$17.70 mln
$17.80 mln (2 Analysts)
Q2 Gross Margin
39.6%


Analyst Coverage

The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 1 "strong buy" or "buy", 1 "hold" and no "sell" or "strong sell"

The average consensus recommendation for the non-paper containers & packaging peer group is "buy"

Wall Street's median 12-month price target for Karat Packaging Inc is $35.00, about 23% above its August 6 closing price of $26.96

The stock recently traded at 16 times the next 12-month earnings vs. a P/E of 16 three months ago

Press Release: ID:nGNX2Vn2t

(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)