Karat Packaging(NASDAQ) KRT

Karat Packaging Inc. makes and sells disposable items for restaurants and food delivery. It helps food businesses serve customers with cups, cutlery, and takeout containers. The company provides both traditional plastic and eco-friendly compostable products.

Takeout Tools and More

• Foodservice Disposables: Single-use items like food containers, bags, boxes, and tableware used for takeout and dining.
• Beverage Components: Plastic and paper cups, matching lids, and straws designed for various drink types.
• Karat Earth: Environmentally friendly line featuring biopolymer-based and compostable products for sustainability-focused clients.
• Operational Supplies: Essential business items including disposable cutlery, protective gloves, and janitorial cleaning products.
• Custom Solutions: Design and printing services for clients needing branded packaging and specialized logistics.

Strategic Supply Chain Shifts

• Relocated its business operating subsidiary headquarters to Rockwall, Texas, from Chino, California, on Oct. 17, 2025.
• Reduced sourcing from Taiwan to 45.9% in the second quarter of 2026 to diversify its global supply chain.
• Increased domestic product purchases to 19.5% of total sales for the three-month period ended June 30, 2026.
• Expanded purchasing from Indonesia, South America, and Singapore to an aggregate of 12.0% in the second quarter of 2026.

What Makes Karat Unique

The company operates 11 distribution centers across major U.S. metro areas to provide short lead times for customers. Its hybrid model combines broad product distribution with domestic manufacturing to adjust quickly to changing trade conditions.

By the Numbers

• Net sales rose 9.9% year over year to $136.3 million for the three-month period ended June 30, 2026.
• Gross margin reached 56.6% in the second quarter of 2026, aided by a $25.8 million one-time tariff refund.
• Net income was $29.6 million for the quarter ended June 30, 2026, up 168.3% year over year.
• Cash from operating activities increased 130.9% to $40.3 million for the six-month period ended June 30, 2026.
• Non-GAAP adjusted EBITDA margin reached 30.5% in the second quarter of 2026, up from 14.3% the previous year.

The Bottom Line

Karat Packaging has transitioned into a logistics-focused distributor with flexible domestic manufacturing. Its focus on supply chain diversification and eco-friendly products helps it navigate evolving global trade and environmental regulations.