Karat Packaging (NASDAQ:KRT) Posts Earnings Results, Beats Estimates By $0.06 EPS

Karat Packaging (NASDAQ:KRT) announced its earnings results on Thursday. The company reported $0.34 earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of $0.28 by $0.06, FiscalAI reports. Karat Packaging had a return on equity of 18.98% and a net margin of 6.67%.The firm had revenue of $115.62 million for the quarter, compared to analyst estimates of $113.95 million.

Here are the key takeaways from Karat Packaging’s conference call:

• Karat delivered strong top-line momentum with Q4 net sales up 13.7% to $115.6M, driven by double-digit volume growth across major markets and pricing that turned positive for the first time since early 2023.
• Higher import duties and tariffs materially pressured margins — import costs rose to 14.5% of sales (from 8.3%) and included an $8.4M increase in duty/tariff expense, contributing to gross margin falling to 34.0% from 39.2% year‑over‑year.
• Management expects margin tailwinds beginning in Q2 from favorable tariff developments and USD/NTD stabilizing, and guided Q1 sales +8–10% with full‑year sales forecast in the low double‑digit range and improved margins vs. 2025.
• The expanding paper‑bag and eco‑friendly product categories are a key growth driver — eco‑friendly sales rose to 37.3% of revenue in Q4, with new SKUs and national chain opportunities in late stages of the pipeline.
• Strong cash generation and capital returns — Q4 operating cash flow was $15.4M (free cash flow $14.6M), the company made an $8M early loan repayment, paid a regular dividend and repurchased $3M of stock (≈$12M remaining authorization).

Karat Packaging Price Performance

NASDAQ KRT traded up $3.19 during mid-day trading on Friday, hitting $25.50. The stock had a trading volume of 51,427 shares, compared to its average volume of 64,690. The firm’s 50 day moving average is $24.55 and its 200 day moving average is $23.94. The company has a debt-to-equity ratio of 0.14, a current ratio of 2.14 and a quick ratio of 1.09. The stock has a market capitalization of $512.57 million, a price-to-earnings ratio of 17.03, a PEG ratio of 1.27 and a beta of 1.09. Karat Packaging has a twelve month low of $20.61 and a twelve month high of $32.68.

Karat Packaging Dividend Announcement

The company also recently disclosed a quarterly dividend, which was paid on Friday, February 27th. Investors of record on Friday, February 20th were paid a $0.45 dividend. This represents a $1.80 annualized dividend and a yield of 7.1%. The ex-dividend date of this dividend was Friday, February 20th. Karat Packaging’s dividend payout ratio is currently 120.00%.

Institutional Investors Weigh In On Karat Packaging

A number of large investors have recently modified their holdings of KRT. Quarry LP acquired a new stake in shares of Karat Packaging in the third quarter valued at about $70,000. Deutsche Bank AG boosted its position in Karat Packaging by 142.8% during the fourth quarter. Deutsche Bank AG now owns 3,861 shares of the company’s stock worth $87,000 after acquiring an additional 2,271 shares during the last quarter. State of Wyoming acquired a new position in Karat Packaging during the fourth quarter worth about $122,000. Jane Street Group LLC purchased a new stake in Karat Packaging during the 1st quarter valued at about $219,000. Finally, Prelude Capital Management LLC purchased a new stake in Karat Packaging during the 3rd quarter valued at about $227,000. Hedge funds and other institutional investors own 25.20% of the company’s stock.

Karat Packaging News Summary

Here are the key news stories impacting Karat Packaging this week:

• Positive Sentiment: Q4 results beat estimates — Revenue of ~$115.6M (up ~13.7% YoY) and EPS of $0.34 topped expectations; operating profit and net income rose year-over-year, supporting profitability improvement. Karat Packaging Reports Fourth Quarter and Full Year 2025 Financial Results
• Positive Sentiment: Company reiterates growth strategy — Management outlined low double-digit sales growth for full-year 2026 and highlighted progress on expanding its paper-bag manufacturing capacity, which supports medium-term revenue upside and sustainability-led demand. Karat Packaging outlines low double-digit sales growth for 2026 while advancing paper bag expansion
• Positive Sentiment: Insider buying noted — Recent small insider purchase (CFO) reported in coverage, which can be read as a modest positive signal of insider conviction. Karat Packaging (KRT) Releases Q4 2025 Earnings: Revenue and EPS Beat; Operating Cash Flow Weakens
• Neutral Sentiment: Earnings call transparency — Full earnings call/transcript is available with management commentary on margin drivers, customer mix and the paper-bag rollout; useful for modeling but contains both supportive and cautionary details. Karat Packaging Inc. (KRT) Q4 2025 Earnings Call Transcript
• Negative Sentiment: Operating cash flow weakened materially — Cash from operations fell ~88% YoY to under $1M; cash and equivalents declined and capex increased, which could pressure liquidity or require higher working capital financing. Karat Packaging (KRT) Releases Q4 2025 Earnings: Revenue and EPS Beat; Operating Cash Flow Weakens
• Negative Sentiment: Q1 2026 revenue guide comes in below consensus — Management gave Q1 revenue guidance roughly $111.9M–$114.0M versus a ~$116.4M consensus, which may temper near-term expectations. Karat Packaging Inc (KRT) Q4 2025 Earnings Call Highlights: Strong Sales Growth Amid Margin …

Wall Street Analyst Weigh In

A number of equities analysts have weighed in on KRT shares. Weiss Ratings restated a “hold (c+)” rating on shares of Karat Packaging in a research report on Thursday, January 22nd. Zacks Research upgraded shares of Karat Packaging from a “strong sell” rating to a “hold” rating in a research report on Monday, January 5th. Finally, Bank of America set a $24.00 target price on shares of Karat Packaging and gave the stock an “underperform” rating in a research note on Friday. Three investment analysts have rated the stock with a Hold rating and one has given a Sell rating to the stock. According to MarketBeat.com, Karat Packaging has a consensus rating of “Reduce” and an average target price of $27.50.

Karat Packaging Company Profile

Karat Packaging Technologies, Inc (NASDAQ: KRT) is a U.S.-based provider of premium packaging solutions for consumer goods and industrial products. The company specializes in the design, manufacture and delivery of high-quality litho-laminated folding cartons, tubes and flexible packaging. Karat Packaging operates an integrated production model that combines prepress, printing, converting and finishing capabilities to support the branding and shelf-appeal needs of its customers.

The company serves a diverse range of end markets, including food and beverage, confectionery, health and beauty, pharmaceuticals, specialty chemicals and promotional packaging.