KRT Earnings Prediction
The chart below shows how KRT performed 10 days before and after its earnings report, based on data from the past quarters. Typically, KRT sees a -1.48% change in stock price 10 days leading up to the earnings, and a -0.51% change 10 days following the report. On the earnings day itself, the stock moves by +0.03%. This data can give you a slight idea of what to expect for the next quarter's release.
KRT Key Earning Data
2024/Q4
Year Over Year
Quarter Over Quarter
Total Revenue
101.65M
6.35%
-9.86%
Gross Margin
39.18%
9.84%
1.58%
Operating Margin
7.43%
44.27%
-25.48%
Net Margin
5.76%
31.81%
-29.84%
EPS
0.28
47.37%
-37.78%
No Data Available
KRT Earnings Analysis
Karat Packaging Inc Corporation (KRT.O) Earnings Conference Call
Positive
Sales Growth Performance: Sales volume grew 14% and net sales grew 6.3% over the prior year quarter, indicating strong demand and market performance.
Gross Margin Improvement: Achieved a gross margin of 39.2% in the fourth quarter, up from 35.7% in the prior year, reflecting improved cost management and pricing strategies.
Supply Chain Diversification Strategy: Reduced reliance on China for imports to approximately 20%, shifting sourcing to countries with favorable trade conditions, enhancing supply chain resilience.
Eco-Friendly Product Sales Growth: Sales of Eco Friendly products increased 11% year over year, representing 34.5% of total sales, driven by growing demand for sustainable products.
Regional Sales Growth: Positive sales trends observed in California and strong growth in the Midwest, indicating successful market penetration and recovery in key regions.
Distribution Center Expansion: Signed a new lease for a 187,000 square foot distribution center, nearly doubling distribution capacity in California to support anticipated growth.
Automation and AI Investment: Investing in automation and AI to enhance productivity and operational efficiency, indicating a commitment to long-term growth and innovation.
Increased Quarterly Cash Dividend: Board of Directors approved an increase in quarterly cash dividend to $0.45 per share, reflecting strong cash flow and commitment to shareholder returns.
Sales Growth Expectations: Expecting robust sales growth in January and February 2025, with positive momentum anticipated to continue throughout the year.
Negative
Sales Volume vs. Net Sales: Despite a 14% growth in sales volume, net sales only grew by 6.3%, indicating potential pricing pressures or market saturation.
Pricing Impact Challenges: The company experienced a $5.4 million unfavorable pricing impact year-over-year, which could indicate challenges in maintaining margins.
Retail Channel Sales Decline: Sales to the retail channel decreased by 1.4%, suggesting a decline in performance in this segment.
Decline in Online Sales: Online sales were down 6.1%, reflecting a negative trend in this channel compared to the previous year.
Rising Operating Expenses: Operating expenses increased by 10.4%, which could indicate rising costs that may impact profitability going forward.
Rising Administrative Expenses: General and administrative expenses rose significantly, driven by increased labor costs and higher stock-based compensation, which could pressure margins.
Gross Margin Decline Anticipated: The company anticipates a decline in gross margin for 2025, with guidance suggesting a drop of 200 basis points from the previous year, indicating potential challenges in cost management.
Tariff Impact on Pricing: There is uncertainty regarding tariffs and their potential impact on costs, which could affect pricing strategies and margins in the future.
KRT FAQs
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KRT Earning Call Sentiment
Earnings call transcript: Karat Packaging Q4 2024 misses EPS forecast
KRT.O
0.45%Positive
The earnings call reflects strong financial performance with increased net sales, gross margin, and net income. The company has also increased its dividend, indicating confidence in future cash flows. Despite some uncertainties regarding tariffs and operational costs, the guidance for revenue growth and EBITDA margin is optimistic. The company's strategic focus on eco-friendly products and geographic expansion adds to the positive sentiment. Overall, the financial health and strategic initiatives suggest a positive stock price movement.
