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

*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

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(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.)