Karat Packaging Inaugurates Robust Q3 2025 Growth with $100M Paper Bag Expansion and Share Repurchase Program

Karat Packaging reported a record third quarter with net sales rising over 10% year-on-year to $124.5 million, driven by strong volume growth, a favorable product mix, and effective pricing strategies. CEO Alan Yu highlighted double-digit gains in critical markets like Texas and California, maintaining a healthy gross margin of 34.5% despite increased import duties and tariffs. The company strategically increased domestic sourcing to 20% while reducing imports from Taiwan, proactively managing tariff risks to preserve competitive advantages. Notably, Karat launched paper bags as a new product line, securing a major national chain account expected to generate about $20 million annually over two years starting from Q3. The launch underscores Karat’s ambition to scale this segment beyond $100 million in revenue within two to three years. Alongside these growth initiatives, Karat introduced a $15 million share repurchase program, reflecting confidence in its financial health and future prospects. CFO Jian Guo detailed solid operational performance and robust guidance for a 10-14% sales increase in Q4, backed by efficient cost management and a growing customer pipeline.