Karat Packaging Inc. (KRT) Q3 2025 Earnings Call Transcript
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Nov 07 2025
0mins
Should l Buy KRT?
Source: SeekingAlpha
Net Sales $124.5 million, up 10.4% year-over-year from $112.8 million. The increase was driven by a $9.4 million rise in volume and a $3.5 million favorable impact from product mix, partially offset by a $0.7 million unfavorable pricing comparison.
Gross Margin 34.5%, down from 38.6% in the prior year quarter. The decline was due to higher import costs (14.4% of net sales compared to 8.6% previously), partially offset by favorable vendor pricing, product mix, and reduced inventory write-offs.
Operating Expenses $34.3 million, up from $32.2 million in the prior year quarter. The increase was driven by $2.1 million higher shipping costs, $0.7 million higher rent expenses, and $0.6 million higher salaries and benefits, partially offset by a $1.4 million reduction in online platform fees.
Operating Income $8.6 million, down from $11.3 million in the prior year quarter. The decline was due to increased operating expenses and lower gross margin.
Net Income $7.6 million, down from $9.3 million in the prior year quarter. Net income margin decreased to 6.1% from 8.2%. The decline was attributed to higher import costs and increased operating expenses.
Adjusted EBITDA $13.1 million, down from $14.7 million in the prior year quarter. Adjusted EBITDA margin decreased to 10.5% from 13.0%, primarily due to higher import costs and operating expenses.
Operating Cash Flow $1.0 million, down from $19.5 million in the prior year quarter. The decline was due to increased duty and tariff payments and inventory purchase payments, partially offset by strong collections.
Working Capital $91.1 million as of September 30, 2025, reflecting financial liquidity and operational cash flow management.
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Analyst Views on KRT
Wall Street analysts forecast KRT stock price to rise
3 Analyst Rating
1 Buy
1 Hold
1 Sell
Hold
Current: 22.340
Low
22.00
Averages
28.50
High
35.00
Current: 22.340
Low
22.00
Averages
28.50
High
35.00
About KRT
Karat Packaging Inc. is a specialty distributor and manufacturer of a range of disposable foodservice products and related items, primarily used by national and regional restaurants and in foodservice settings across the United States. The Company classifies its customers into four categories. Distributors include national and regional distributors across the United States that purchase their products and provide a channel to offer their products to restaurants, offices, schools, government entities and other end users. National and regional chains typically include fast casual, fast-food restaurants and supermarket chains with locations across multiple states to which they supply specified products. Retail primarily includes regional bubble tea shops and frozen yogurt shops that often purchase their specialty beverage ingredients and related items. E-commerce/Online includes small businesses, often with only one or two locations, as well as customers who purchase for personal use.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Karat Packaging Set to Announce Earnings Results
- Revenue Performance: Karat Packaging reported revenues of $124.5 million last quarter, a 10.4% year-over-year increase that met analysts' expectations, yet it significantly missed EPS estimates, indicating challenges in profitability.
- Market Expectations: This quarter, the market anticipates a 12.1% year-over-year revenue growth for Karat Packaging, an improvement from the 6.3% increase recorded in the same quarter last year, reflecting cautious optimism about its future performance.
- Analyst Confidence: Over the past 30 days, analysts covering the company have generally reaffirmed their estimates, suggesting they expect the business to remain stable heading into earnings, despite multiple revenue misses over the past two years.
- Stock Volatility: Karat Packaging's stock has declined 14.3% over the past month, compared to an average drop of 8% in the sector, with the current share price at $22.25 against an analyst price target of $28.50, indicating market expectations for a rebound.
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- Sector Analysis: Analysts have rated three high-yielding stocks in the industrials sector, namely Insperity Inc (NYSE:NSP), Karat Packaging Inc (NASDAQ:KRT), and Quad/Graphics Inc (NYSE:QUAD), indicating market confidence in these companies.
- Dividend Appeal: High dividend stocks serve as a safe haven for investors seeking stable returns amid market uncertainty, potentially attracting more investors looking for reliable income streams.
- Market Trends: As market volatility increases, the rising interest in high dividend stocks reflects a growing demand for safe assets, which may influence future investment strategies and capital flows.
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- Dividend Yield: The forward yield of 7.03% makes this dividend particularly appealing in the current market environment, potentially enhancing the company's attractiveness in the capital markets and bolstering long-term investor confidence.
- Shareholder Record Dates: The dividend will be payable on February 27, with a record date of February 20 and an ex-dividend date also on February 20, providing shareholders with a clear timeline for financial planning and investment decisions.
- Rating Downgrade Impact: Despite the stable dividend, Karat Packaging was downgraded in BofA's rating changes, which may have a certain impact on market sentiment, prompting investors to monitor subsequent market reactions and changes in the company's fundamentals.
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- Investor Preference: During turbulent and uncertain market conditions, many investors gravitate towards high-dividend-yielding stocks, which typically possess strong free cash flows that enable them to reward shareholders with substantial dividend payouts.
- Analyst Ratings: Benzinga offers the latest analyst ratings on high-yield stocks, allowing investors to review the most recent analyses of their favorite stocks by visiting the Analyst Stock Ratings page.
- Sector Focus: In the industrials sector, Karat Packaging Inc (NASDAQ:KRT), Robert Half Inc (NYSE:RHI), and Insperity Inc (NYSE:NSP) are highlighted as representative high-yield stocks, drawing attention from analysts.
- Data Support: Benzinga's extensive database includes a wide array of analyst ratings, enabling investors to sort through ratings based on analyst accuracy, thereby facilitating more informed investment decisions.
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Analyst Ratings Update for UPS, KRT, and RHI with Dividend Yields
- UPS Analyst Rating: JP Morgan analyst Brian Ossenbeck maintains a Neutral rating for UPS, raising the price target from $97 to $99, reflecting a 6.14% dividend yield and a 70% accuracy rate, indicating confidence in the company's stability.
- KRT Stock Rating Change: B of A Securities analyst George Staphos downgraded Karat Packaging from Buy to Underperform, cutting the price target from $27 to $22; despite a 7.21% dividend yield, the analyst's 53% accuracy suggests market concerns about its outlook.
- RHI Analyst Perspective: Barclays analyst Manav Patnaik keeps Robert Half at Equal-Weight, lowering the price target from $45 to $36; with an 8.33% dividend yield and a 73% accuracy rate, this reflects a cautious view on the company's future performance.
- Market Dynamics: In uncertain market conditions, investors are leaning towards high-dividend stocks, and Benzinga's real-time news alerts keep investors informed about the latest developments for UPS, KRT, and RHI to make more informed investment decisions.
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Robert Half Cuts Price Target to $36, Dividend Yield at 8.69%
- Analyst Rating Adjustment: Barclays analyst Manav Patnaik maintained an Equal-Weight rating on Robert Half while slashing the price target from $45 to $36, reflecting a cautious outlook on the company's future performance, which may impact investor confidence.
- Weak Earnings Report: On October 22, Robert Half posted quarterly results that fell short of expectations, exacerbating market concerns about its profitability and potentially affecting its stock price performance.
- Industry Dynamics: During turbulent market times, investors tend to gravitate towards high-dividend stocks, and Robert Half's 8.69% dividend yield attracts those seeking stable income; however, the company's declining performance may weaken its appeal.
- Market Reaction: The downgrade in price target by analysts may lead to negative market reactions towards Robert Half, further affecting investor confidence in the stock within the industrial sector.
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Karat Packaging Set to Announce Earnings Results
- Revenue Performance: Karat Packaging reported revenues of $124.5 million last quarter, a 10.4% year-over-year increase that met analysts' expectations, yet it significantly missed EPS estimates, indicating challenges in profitability.
- Market Expectations: This quarter, the market anticipates a 12.1% year-over-year revenue growth for Karat Packaging, an improvement from the 6.3% increase recorded in the same quarter last year, reflecting cautious optimism about its future performance.
- Analyst Confidence: Over the past 30 days, analysts covering the company have generally reaffirmed their estimates, suggesting they expect the business to remain stable heading into earnings, despite multiple revenue misses over the past two years.
- Stock Volatility: Karat Packaging's stock has declined 14.3% over the past month, compared to an average drop of 8% in the sector, with the current share price at $22.25 against an analyst price target of $28.50, indicating market expectations for a rebound.
See More
High Dividend Stocks Favored Amid Market Turbulence
- Investor Preference: During turbulent and uncertain market conditions, many investors gravitate towards high dividend-yielding stocks, which typically possess high free cash flows and reward shareholders with substantial dividend payouts.
- Sector Analysis: Analysts have rated three high-yielding stocks in the industrials sector, namely Insperity Inc (NYSE:NSP), Karat Packaging Inc (NASDAQ:KRT), and Quad/Graphics Inc (NYSE:QUAD), indicating market confidence in these companies.
- Dividend Appeal: High dividend stocks serve as a safe haven for investors seeking stable returns amid market uncertainty, potentially attracting more investors looking for reliable income streams.
- Market Trends: As market volatility increases, the rising interest in high dividend stocks reflects a growing demand for safe assets, which may influence future investment strategies and capital flows.
See More
Karat Packaging Declares Quarterly Dividend of $0.45
- Quarterly Dividend Announcement: Karat Packaging has declared a quarterly dividend of $0.45 per share, consistent with previous distributions, indicating stable cash flow and profitability, which is likely to attract more investor interest.
- Dividend Yield: The forward yield of 7.03% makes this dividend particularly appealing in the current market environment, potentially enhancing the company's attractiveness in the capital markets and bolstering long-term investor confidence.
- Shareholder Record Dates: The dividend will be payable on February 27, with a record date of February 20 and an ex-dividend date also on February 20, providing shareholders with a clear timeline for financial planning and investment decisions.
- Rating Downgrade Impact: Despite the stable dividend, Karat Packaging was downgraded in BofA's rating changes, which may have a certain impact on market sentiment, prompting investors to monitor subsequent market reactions and changes in the company's fundamentals.
See More
Dividend Stocks Gain Favor Amid Market Turbulence
- Investor Preference: During turbulent and uncertain market conditions, many investors gravitate towards high-dividend-yielding stocks, which typically possess strong free cash flows that enable them to reward shareholders with substantial dividend payouts.
- Analyst Ratings: Benzinga offers the latest analyst ratings on high-yield stocks, allowing investors to review the most recent analyses of their favorite stocks by visiting the Analyst Stock Ratings page.
- Sector Focus: In the industrials sector, Karat Packaging Inc (NASDAQ:KRT), Robert Half Inc (NYSE:RHI), and Insperity Inc (NYSE:NSP) are highlighted as representative high-yield stocks, drawing attention from analysts.
- Data Support: Benzinga's extensive database includes a wide array of analyst ratings, enabling investors to sort through ratings based on analyst accuracy, thereby facilitating more informed investment decisions.
See More
Analyst Ratings Update for UPS, KRT, and RHI with Dividend Yields
- UPS Analyst Rating: JP Morgan analyst Brian Ossenbeck maintains a Neutral rating for UPS, raising the price target from $97 to $99, reflecting a 6.14% dividend yield and a 70% accuracy rate, indicating confidence in the company's stability.
- KRT Stock Rating Change: B of A Securities analyst George Staphos downgraded Karat Packaging from Buy to Underperform, cutting the price target from $27 to $22; despite a 7.21% dividend yield, the analyst's 53% accuracy suggests market concerns about its outlook.
- RHI Analyst Perspective: Barclays analyst Manav Patnaik keeps Robert Half at Equal-Weight, lowering the price target from $45 to $36; with an 8.33% dividend yield and a 73% accuracy rate, this reflects a cautious view on the company's future performance.
- Market Dynamics: In uncertain market conditions, investors are leaning towards high-dividend stocks, and Benzinga's real-time news alerts keep investors informed about the latest developments for UPS, KRT, and RHI to make more informed investment decisions.
See More
Robert Half Cuts Price Target to $36, Dividend Yield at 8.69%
- Analyst Rating Adjustment: Barclays analyst Manav Patnaik maintained an Equal-Weight rating on Robert Half while slashing the price target from $45 to $36, reflecting a cautious outlook on the company's future performance, which may impact investor confidence.
- Weak Earnings Report: On October 22, Robert Half posted quarterly results that fell short of expectations, exacerbating market concerns about its profitability and potentially affecting its stock price performance.
- Industry Dynamics: During turbulent market times, investors tend to gravitate towards high-dividend stocks, and Robert Half's 8.69% dividend yield attracts those seeking stable income; however, the company's declining performance may weaken its appeal.
- Market Reaction: The downgrade in price target by analysts may lead to negative market reactions towards Robert Half, further affecting investor confidence in the stock within the industrial sector.
See More
