Karat Packaging Inc (KRT) Q2 2026 Earnings Report

The call presented a mix of solid operational momentum—record sales, strong online growth, expanded customer wins, distribution center investment, sourcing diversification and improved reported profitability—largely amplified by a significant one-time IEEPA tariff refund. Underlying metrics (gross margin excluding refund, rising product/import and shipping costs, retail channel decline and higher operating expenses) temper the headline results. Management provided conservative near-term margin guidance reflecting minimal expected refunds and highlighted actions to control shipping and SG&A costs.

Management updated 3Q26 guidance calling for net sales to grow in the low double‑digit range year‑over‑year, gross margin of 35.0%–37.0% and adjusted EBITDA margin of 9.0%–11.0% (both including only insignificant IEEPA tariff refunds expected in the quarter); for full‑year 2026 they expect net sales to grow in the low double‑digit range, full‑year gross margin in the low‑40% range and adjusted EBITDA margin of approximately the mid‑teens (reflecting IEEPA refunds recorded in H1); management also reiterated online sales are on track for roughly $100 million this year and emphasized continued cost‑management to drive operating leverage.