Karat Packaging (NASDAQ:KRT) Posts Earnings Results, Beats Expectations By $1.01 EPS

Karat Packaging (NASDAQ:KRT) released its earnings results on Thursday. The company reported $1.48 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $0.47 by $1.01, FiscalAI reports. The firm had revenue of $136.30 million during the quarter, compared to analysts’ expectations of $135.46 million. Karat Packaging had a return on equity of 31.42% and a net margin of 10.18%.

Here are the key takeaways from Karat Packaging’s conference call:

• Record sales and strong online growth: Second-quarter net sales rose 9.9% year over year to $136.3 million, while online sales increased 23.6%; management said July online sales growth accelerated to more than 37% and reiterated its $100 million full-year online revenue target.
• Underlying profitability remained solid despite higher costs. Excluding the $25.8 million IEEPA tariff refund, gross margin was 37.7%, supported by sourcing diversification, potential lower ocean freight, and favorable currency movements.
• Growth investments and customer wins are expanding the platform: Karat added four chain accounts and is finalizing a 47,000-square-foot Orlando distribution center expected to open in the third quarter, improving Southeast fulfillment and e-commerce delivery times.
• Management expects continued top-line growth but sharply lower margins after the tariff benefit fades. Third-quarter revenue is projected to grow at a low-double-digit rate, with gross margin of 35%–37% and adjusted EBITDA margin of 9%–11%; full-year guidance calls for gross margin in the low 40% range and adjusted EBITDA margin around the mid-teens.
• Operating expenses remain a pressure point. Shipping and transportation, salaries and benefits, online platform costs, and marketing expenses all increased, prompting initiatives to use Karat’s internal fleet and improve labor efficiency.

Karat Packaging Stock Performance

Shares of KRT stock traded up $4.72 on Friday, hitting $47.09. The company’s stock had a trading volume of 380,663 shares, compared to its average volume of 120,295. The company has a debt-to-equity ratio of 0.15, a quick ratio of 1.15 and a current ratio of 2.29. The stock’s 50 day moving average is $34.40 and its 200-day moving average is $29.37. Karat Packaging has a fifty-two week low of $20.61 and a fifty-two week high of $50.00. The company has a market capitalization of $939.92 million, a PE ratio of 18.84, a PEG ratio of 2.04 and a beta of 0.82.

Karat Packaging Increases Dividend

The firm also recently announced a quarterly dividend, which will be paid on Friday, August 28th. Stockholders of record on Friday, August 21st will be given a $0.47 dividend. The ex-dividend date of this dividend is Friday, August 21st. This is a boost from Karat Packaging’s previous quarterly dividend of $0.45. This represents a $1.88 dividend on an annualized basis and a dividend yield of 4.0%. Karat Packaging’s dividend payout ratio (DPR) is presently 113.92%.

Analyst Ratings Changes

Several equities research analysts have commented on KRT shares. Lake Street Capital restated a “buy” rating and issued a $39.00 target price on shares of Karat Packaging in a research note on Friday, May 8th. Zacks Research downgraded shares of Karat Packaging from a “strong-buy” rating to a “hold” rating in a report on Tuesday, May 12th. Wall Street Zen lowered shares of Karat Packaging from a “buy” rating to a “hold” rating in a research report on Saturday, July 25th. The Goldman Sachs Group downgraded shares of Karat Packaging to a “neutral” rating in a research note on Thursday, June 4th. Finally, William Blair upgraded Karat Packaging from a “market perform” rating to an “outperform” rating in a report on Thursday, June 4th. Three research analysts have rated the stock with a Buy rating, two have assigned a Hold rating and one has issued a Sell rating to the company. According to data from MarketBeat.com, the company has an average rating of “Hold” and an average target price of $36.50.

Institutional Trading of Karat Packaging

Several hedge funds and other institutional investors have recently bought and sold shares of KRT. Quarry LP acquired a new position in shares of Karat Packaging during the 3rd quarter worth approximately $70,000. Deutsche Bank AG increased its holdings in shares of Karat Packaging by 142.8% during the fourth quarter. Deutsche Bank AG now owns 3,861 shares of the company’s stock worth $87,000 after purchasing an additional 2,271 shares during the period. State of Wyoming acquired a new stake in shares of Karat Packaging in the fourth quarter valued at approximately $122,000. Jane Street Group LLC acquired a new stake in shares of Karat Packaging in the first quarter valued at approximately $219,000. Finally, Prelude Capital Management LLC acquired a new stake in shares of Karat Packaging in the third quarter valued at approximately $227,000. Institutional investors and hedge funds own 25.20% of the company’s stock.

Trending Headlines about Karat Packaging

Here are the key news stories impacting Karat Packaging this week:

• Positive Sentiment: Major EPS beat: Quarterly diluted earnings reached approximately $1.46–$1.48 per share, compared with analyst estimates ranging from $0.47 to $0.51 and $0.57 a year earlier. Karat Packing Beats Q2 Earnings and Revenue Estimates
• Positive Sentiment: Revenue growth remained solid: Second-quarter revenue rose 9.9% year over year to $136.3 million, narrowly exceeding the $135.46 million consensus estimate. Karat Packaging Reports Second Quarter 2026 Financial Results
• Positive Sentiment: Profitability and cash flow improved sharply: Gross profit increased 57.1% to $77.2 million, operating profit more than doubled to $37.6 million, and operating cash flow reached $33.2 million. Capital spending was modest at $1.4 million, while total liabilities declined to $142.5 million. Karat Packaging Q2 2026 Earnings
• Positive Sentiment: Dividend increased: Karat Packaging declared a quarterly dividend of $0.47 per share, up from $0.45, with payment scheduled for August 28 to shareholders of record on August 21. Karat Packaging Dividend Information
• Neutral Sentiment: Institutional activity was mixed: Some hedge funds added shares, while others reduced or eliminated positions. William Blair maintained an “Outperform” rating, but the limited analyst coverage provides relatively little confirmation of broader Wall Street sentiment.
• Neutral Sentiment: Valuation and expectations are higher: Following the earnings-driven rally, KRT trades near its 52-week high with a price-to-earnings ratio near 30, increasing the importance of continued earnings growth.

Karat Packaging Company Profile

Karat Packaging Technologies, Inc (NASDAQ: KRT) is a U.S.-based provider of premium packaging solutions for consumer goods and industrial products. The company specializes in the design, manufacture and delivery of high-quality litho-laminated folding cartons, tubes and flexible packaging. Karat Packaging operates an integrated production model that combines prepress, printing, converting and finishing capabilities to support the branding and shelf-appeal needs of its customers.

The company serves a diverse range of end markets, including food and beverage, confectionery, health and beauty, pharmaceuticals, specialty chemicals and promotional packaging.