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Karat Packaging (KRT) Q1 Earnings & Revenues Miss Estimates
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Karat Packaging, Inc. (KRT - Free Report) reported first-quarter 2024 adjusted earnings per share (EPS) of 40 cents, missing the Zacks Consensus Estimate of 44 cents. The bottom line declined 11% from earnings of 45 cents in the year-ago quarter.
Including one-time items, EPS was 31 cents compared with the year-ago quarter’s 45 cents.
Total revenues decreased 0.2% year over year to $96 million in the reported quarter. The top line missed the Zacks Consensus Estimate of $100 million. The year-over-year decline was led by pricing comparison, which was partially offset by an increase in the volume and product mix, and the inclusion of online sales platform fees.
Karat Packaging Inc. Price, Consensus and EPS Surprise
The cost of sales increased 0.7% year over year to $58 million. Gross profit fell 1.6% year over year to $38 million. The gross margin was 39.3% in the reported quarter compared with the year-ago quarter’s 39.9%.
Operating expenses in the quarter were $29.5 million compared with $25 million in the year-ago quarter. The 16.1% rise was caused by a non-cash impairment charge, the inclusion of online sales platform fees in operating expenditure, and higher rent and warehouse expenses as a result of labor expansion and new leased facilities.
Adjusted EBITDA declined 11.8% year over year to $13.5 million in the first quarter. The adjusted EBITDA margin was 14.1% in the quarter under review compared with 16% in the first quarter of 2023.
Cash Position
Karat Packaging reported cash and cash equivalents of $13 million as of Mar 31, 2024, down from $23 million as of Dec 31, 2023. The company generated $6.6 million of cash flow from operations in the quarter compared with $14.2 million in the prior-year quarter.
Guidance
KRT anticipates a mid-single-digit year-over-year increase in net sales for the second quarter of 2024. The gross margin for the quarter is projected between 38% and 40%, whereas it recorded 38.5% in the second quarter of 2023.
For 2024, sales growth is forecast at 8-15% from that reported in the previous year. The targeted gross margin for the year is between 37% and 40%.
Price Performance
Shares of the company have gained 86.3% in the past year compared with the industry’s 14.6% rise.
AptarGroup, Inc. (ATR - Free Report) reported a first-quarter 2024 adjusted EPS of $1.26, beating the Zacks Consensus Estimate of $1.13. The bottom line increased 31% from 95 cents (including comparable exchange rates) per share in the year-ago quarter, aided by strong sales growth in the Pharma business, and a continued margin expansion in the Beauty and Closures businesses.
AptarGroup’s total revenues increased 6.4% year over year to $915 million, surpassing the Zacks Consensus Estimate of $897 million. Core sales, excluding currency and acquisition effects, improved 5% year over year.
Sonoco Products Co. (SON - Free Report) reported an adjusted EPS of $1.12 in the first quarter of 2024, beating the Zacks Consensus Estimate of $1.08. The bottom line fell 20% from the prior-year quarter as gains from improved productivity were offset by price/cost pressures and lower volumes.
Sonoco’s net sales were $1.64 billion, which fell short of the consensus estimate of $1.69 billion. The top line declined 5.3% year over year on lower volumes and pricing, somewhat offset by acquisitions.
Packaging Corporation of America (PKG - Free Report) reported an adjusted EPS of $1.72 in the first quarter of 2024, beating the Zacks Consensus Estimate of $1.63. The bottom line dipped 22% year over year mainly due to lower prices and mix in the Packaging and Paper segments. These were partially offset by higher volumes in the Packaging and Paper segments.
PKG’s sales in the quarter rose 0.2% year over year to $1.98 billion. The top line surpassed the Zacks Consensus Estimate of $1.91 billion.
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Karat Packaging (KRT) Q1 Earnings & Revenues Miss Estimates
Karat Packaging, Inc. (KRT - Free Report) reported first-quarter 2024 adjusted earnings per share (EPS) of 40 cents, missing the Zacks Consensus Estimate of 44 cents. The bottom line declined 11% from earnings of 45 cents in the year-ago quarter.
Including one-time items, EPS was 31 cents compared with the year-ago quarter’s 45 cents.
Total revenues decreased 0.2% year over year to $96 million in the reported quarter. The top line missed the Zacks Consensus Estimate of $100 million. The year-over-year decline was led by pricing comparison, which was partially offset by an increase in the volume and product mix, and the inclusion of online sales platform fees.
Karat Packaging Inc. Price, Consensus and EPS Surprise
Karat Packaging Inc. price-consensus-eps-surprise-chart | Karat Packaging Inc. Quote
Operational Update
The cost of sales increased 0.7% year over year to $58 million. Gross profit fell 1.6% year over year to $38 million. The gross margin was 39.3% in the reported quarter compared with the year-ago quarter’s 39.9%.
Operating expenses in the quarter were $29.5 million compared with $25 million in the year-ago quarter. The 16.1% rise was caused by a non-cash impairment charge, the inclusion of online sales platform fees in operating expenditure, and higher rent and warehouse expenses as a result of labor expansion and new leased facilities.
Adjusted EBITDA declined 11.8% year over year to $13.5 million in the first quarter. The adjusted EBITDA margin was 14.1% in the quarter under review compared with 16% in the first quarter of 2023.
Cash Position
Karat Packaging reported cash and cash equivalents of $13 million as of Mar 31, 2024, down from $23 million as of Dec 31, 2023. The company generated $6.6 million of cash flow from operations in the quarter compared with $14.2 million in the prior-year quarter.
Guidance
KRT anticipates a mid-single-digit year-over-year increase in net sales for the second quarter of 2024. The gross margin for the quarter is projected between 38% and 40%, whereas it recorded 38.5% in the second quarter of 2023.
For 2024, sales growth is forecast at 8-15% from that reported in the previous year. The targeted gross margin for the year is between 37% and 40%.
Price Performance
Shares of the company have gained 86.3% in the past year compared with the industry’s 14.6% rise.
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Zacks Rank
Karat Packaging currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Performances of Other Packaging Stocks
AptarGroup, Inc. (ATR - Free Report) reported a first-quarter 2024 adjusted EPS of $1.26, beating the Zacks Consensus Estimate of $1.13. The bottom line increased 31% from 95 cents (including comparable exchange rates) per share in the year-ago quarter, aided by strong sales growth in the Pharma business, and a continued margin expansion in the Beauty and Closures businesses.
AptarGroup’s total revenues increased 6.4% year over year to $915 million, surpassing the Zacks Consensus Estimate of $897 million. Core sales, excluding currency and acquisition effects, improved 5% year over year.
Sonoco Products Co. (SON - Free Report) reported an adjusted EPS of $1.12 in the first quarter of 2024, beating the Zacks Consensus Estimate of $1.08. The bottom line fell 20% from the prior-year quarter as gains from improved productivity were offset by price/cost pressures and lower volumes.
Sonoco’s net sales were $1.64 billion, which fell short of the consensus estimate of $1.69 billion. The top line declined 5.3% year over year on lower volumes and pricing, somewhat offset by acquisitions.
Packaging Corporation of America (PKG - Free Report) reported an adjusted EPS of $1.72 in the first quarter of 2024, beating the Zacks Consensus Estimate of $1.63. The bottom line dipped 22% year over year mainly due to lower prices and mix in the Packaging and Paper segments. These were partially offset by higher volumes in the Packaging and Paper segments.
PKG’s sales in the quarter rose 0.2% year over year to $1.98 billion. The top line surpassed the Zacks Consensus Estimate of $1.91 billion.