Loading...
•
Jun 30, 2024
Karat Packaging Q2 2024 Earnings Report
Karat Packaging's financial performance modestly improved with increased net sales and gross profit, but experienced a decrease in net income and adjusted EBITDA compared to the prior-year quarter.
Key Takeaways
Karat Packaging Inc. reported a 3.5% increase in net sales to $112.6 million and a 3.7% increase in gross profit to $43.4 million for the second quarter of 2024. However, net income decreased to $9.2 million from $10.7 million in the prior-year quarter, and adjusted EBITDA decreased to $15.7 million from $21.1 million in the prior-year quarter. The company's gross margin remained steady at 38.5%.
Net sales increased by 3.5% to $112.6 million compared to the prior-year quarter.
Gross profit rose by 3.7% to $43.4 million, maintaining a gross margin of 38.5%.
Net income decreased to $9.2 million, with a net income margin of 8.2%.
Adjusted EBITDA was $15.7 million, representing a margin of 13.9%.
Karat Packaging
Karat Packaging
Karat Packaging Revenue by Segment
Revenue by Segment
Chains and distributors Revenue
CapyFin.comOnline Revenue
CapyFin.comRetail Revenue
CapyFin.com Forward Guidance
The company anticipates net sales to increase by mid to high single digits for the third quarter of 2024 and expects a gross margin of 38 to 39 percent. For the full year 2024, net sales are projected to increase by mid-single digits, with a gross margin goal of 38 to 40 percent.
Positive Outlook
- Net sales for Q3 2024 are expected to increase by mid to high single digits.
- Gross margin for Q3 2024 is expected to be 38 to 39 percent.
- Net sales for the full year 2024 are expected to increase by mid-single digits.
- Gross margin goal for the full year 2024 is expected to be 38 to 40 percent.
- Business pipeline continues to expand with new national and regional chain accounts.
Challenges Ahead
- Initiation of certain new orders took longer than anticipated due to administrative set-up procedures at larger chain accounts.
- Softer demand was experienced in certain categories.
- Significantly higher ocean freight costs impacted gross margin.
- Operating income in the 2024 second quarter decreased to $11.1 million, from $13.3 million in the prior-year quarter, primarily due to an increase in operating expenses of $3.8 million, partially offset by an increase in gross profit of $1.5 million.
- Adjusted EBITDA decreased to $15.7 million for the 2024 second quarter, compared with $21.1 million for the prior-year quarter.
Revenue & Expenses
Visualization of income flow from segment revenue to net income