Karat Packaging's Q3 EPS misses estimates

Karat Packaging

06/11/2025 22:02

Overview

Karat Packaging Q3 net sales slightly beat analyst expectations, reaching $124.5 mln

Adjusted EPS for Q3 missed analyst expectations

Outlook

Company expects Q4 2025 net sales to rise 10-14% from prior-year quarter

Karat anticipates Q4 2025 gross margin between 33-35%

Company maintains full-year guidance on net sales, gross margin, and adjusted EBITDA margin

Result Drivers

VOLUME GROWTH - Co attributes Q3 sales increase to strong volume growth and favorable product mix

TARIFF IMPACT - Higher import costs due to increased tariffs affected gross margin, per CEO Alan Yu

NEW BUSINESS SEGMENT - Expansion into paper bags projected to add $20 mln in annual revenue

Key Details

Metric
Beat/Miss
Actual
Consensus Estimate
Q3 Sales
Slight Beat*
$124.50 mln
$124.09 mln (3 Analysts)
Q3 Adjusted EPS
Miss
$0.37
$0.39 (2 Analysts)
Q3 Net Income
$7.60 mln
Q3 Adjusted EBITDA
Slight Beat*
$13.10 mln
$13.01 mln (3 Analysts)
Q3 Gross Margin
34.50%


*Applies to a deviation of less than 1%; not applicable for per-share numbers.

Analyst Coverage

The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 2 "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 $33.00, about 23.2% above its November 5 closing price of $25.36

The stock recently traded at 14 times the next 12-month earnings vs. a P/E of 16 three months ago

Press Release: ID:nGNX2QLjN2

For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact RefinitivNewsSupport@thomsonreuters.com.

(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.)