NASDAQ$KRT

Karat Packaging Inc · Q1 2024 earnings

Q1 2024 earnings · · Investor relations

Briefing

Karat Packaging's financial performance remained relatively stable with slight decreases in net sales and net income compared to the prior-year quarter, while eco-friendly product sales saw growth.

Karat Packaging reported a slight decrease in net sales, from $95.8 million to $95.6 million, and a decrease in net income from $9.2 million to $6.5 million for the first quarter of 2024. However, sales of eco-friendly products increased by 5.6% and now represent 34.5% of total sales.

  • Net sales slightly decreased to $95.6 million compared to $95.8 million in the prior-year quarter.
  • Gross profit decreased to $37.6 million from $38.1 million in the prior-year quarter.
  • Net income decreased to $6.5 million, impacted by a $1.5 million non-cash impairment, compared to $9.2 million in the prior-year quarter.
  • Eco-friendly product sales grew by 5.6% and now account for 34.5% of total sales, up from 32.6% a year ago.

Headline financials

Total Revenue

$95.6M

Previous: $95.8M-0.2%
EPS

$0.31

Previous: $0.46-32.6%
Adjusted EBITDA Margin

14.2%

Previous: 15.9%-10.7%
Gross Margin

39.3%

Previous: 39.8%-1.3%
Net Income Margin

6.8%

Previous: 9.6%-29.2%
Capital Expenditures

-$163K

Previous: -$1.04M+84.4%
Free Cash Flow

$6M

Previous: $7.96M-24.6%
Net Income

$6.17M

Previous: $9.01M-31.5%
Operating Income

$8.08M

Previous: $12.7M-36.6%
Gross Profit

$37.6M

Previous: $38.1M-1.4%
Cash & Equivalents

$13.1M

Previous: $23.2M-43.4%
Total Assets

$279M

Previous: $273M+2.1%
Stock-Based Comp

$375K

Previous: $277K+35.4%

Revenue & EPS history

Karat Packaging · Revenue · Quarterly

$95.6M

Q1 2024-0.2%vs Q1 2023
Beat estimate in 9 of 15 quarters(60%)
ActualEstimate

Revenue by segment

Karat Packaging · $82.1M total across 3 segments · Q3 2023

  • Chains and distributors
    $61M-4.0%
  • Online
    $14.3M+1.6%
  • Retail
    $6.81M-19.3%

Forward guidance

Karat Packaging anticipates net sales to increase by mid-single digits for the second quarter of 2024 and expects a gross margin between 38 to 40 percent. For the full year 2024, net sales are projected to increase by 8 to 15 percent with a gross margin goal of 37 to 40 percent.

Tailwinds

  • Net sales for Q2 2024 are expected to increase by mid-single digits from the prior-year quarter.
  • Gross margin for Q2 2024 is expected to be 38 to 40 percent versus 38.5 percent for the prior-year quarter.
  • Net sales for full year 2024 are expected to increase 8 to 15 percent from the prior year.
  • Gross margin goal for full year 2024 to be 37 to 40 percent versus 37.7 percent from the previous year.
  • Strategic growth initiatives implemented last year are coming to fruition.

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q1 2024

Historical avgQ1 2024

-0.7%

Avg return

Earnings day

+1.2%

Avg return

5 days after

+0.8%

Avg return

30 days after

42%

10 / 24 earnings

Positive

+20.7%

Q4 2025

Best reaction

-18.6%

Q3 2023

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026-7.5%-10.4%-6.3%
Q4 2025+20.7%+24.4%+33.5%
Q3 2025-6.1%-8.5%-8.5%
Q1 2025+10.9%+10.0%+14.2%
Q4 2024-2.1%+0.8%-14.7%
Q3 2024-0.1%+3.5%+5.3%
Q2 2024-14.6%-7.8%-13.2%
Q1 2024-9.0%-5.2%-7.7%
Q4 2023-11.8%-7.2%-5.7%
Q3 2023-18.6%-9.2%-5.5%
Q2 2023+3.8%+21.6%+0.8%
Q1 2023+3.6%+6.2%+12.5%
Q4 2022-1.6%-6.6%-6.2%
Q3 2022-2.8%-7.6%-5.8%
Q2 2022+1.2%+0.1%+1.2%
Q1 2022+11.6%+16.7%+10.0%
Q4 2021+13.3%+26.2%+24.5%
Q3 2020-10.6%-10.8%-9.7%
Q3 2021-7.5%-7.8%-7.6%
Q2 2020-3.7%-6.5%-6.1%
Q2 2021-2.6%-7.6%-6.2%
Q4 2020+6.1%+3.7%+6.2%
Q1 2020+6.1%+3.7%+6.2%
Q1 2021+3.5%+8.2%+8.2%
Q4 2019
Q3 2019
Q2 2019
Q1 2019
Q4 2018
Q2 2018
Q1 2018
Q4 2017

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