Karat Packaging Reports Higher First-Quarter Revenue on Increased Sales Volume

Karat Packaging Inc. reported higher first-quarter 2026 revenue driven by increased sales volume across its disposable foodservice products business, while profit declined due to higher operating expenses and tariff-related costs.

Net sales for the quarter ended March 31, 2026 rose 6.3% year over year to $105.7 million, compared with $99.4 million in the prior-year period. The company said the increase was primarily attributable to higher sales volume and continued customer demand across key product categories.

Gross profit declined to $36.3 million from $38.1 million a year earlier, while gross margin decreased to 34.4% from 38.4%. Karat Packaging said margins were affected by higher freight expenses, increased warehousing costs and additional tariffs on imported products.

Net income fell to $5.2 million, or $0.26 per diluted share, from $8.5 million, or $0.43 per diluted share, in the first quarter of 2025. Adjusted EBITDA decreased to $10.1 million from $13 million in the prior-year quarter.

Chief Executive Officer Alan Yu said the company continued to expand its customer base and product offerings despite a challenging operating environment. The company also noted that it remains focused on inventory management, operational efficiency and mitigating supply chain disruptions.

During the quarter, Karat Packaging generated $11.8 million in cash flow from operating activities and ended the period with $27.7 million in cash and cash equivalents. The company also declared a quarterly cash dividend of $0.45 per share.