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Sep 30, 2022
Karat Packaging Q3 2022 Earnings Report
Reported significant gross margin expansion and record quarterly operating cash flow.
Key Takeaways
Karat Packaging Inc. reported a 7.1% increase in net sales, reaching $110.0 million for the third quarter of 2022. The company experienced a 14.7% increase in gross profit, with a gross margin of 31.1%. Net income rose by 51.1% to $6.2 million, and the company achieved a record quarterly operating cash flow of $20.2 million.
Net sales increased by 7.1% year-over-year to $110.0 million.
Gross profit increased by 14.7% year-over-year to $34.2 million, with gross margin expanding to 31.1%.
Net income increased by 51.1% year-over-year to $6.2 million, resulting in a net income margin of 5.6%.
The company achieved a record quarterly operating cash flow of $20.2 million.
Revenue by Segment
Forward Guidance
The company anticipates net sales between $95 million and $98 million for the fourth quarter of 2022, compared to $91.3 million in the fourth quarter of 2021. The gross margin goal for the full year 2022 is 31% to 32% on average.
Positive Outlook
- Net sales for the 2022 fourth quarter expected to be between $95 million and $98 million.
- Eco-friendly products grew 26.7 percent during the quarter.
- Gross margin improvement is expected to continue into the fourth quarter.
- Ocean freight rates significantly decreased toward the end of the third quarter.
- New initiatives are in place to significantly grow online sales.
Challenges Ahead
- Net sales for the third quarter were impacted by customers' destocking of certain inventory due to supply chain recovery.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
Analyze how earnings announcements historically affect stock price performance
Avg. Return Before/After Earnings
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