Karat Packaging Q2 2026: Record Sales and Net Income, Boosted by $25.8M Tariff Refund
KRT has more than doubled off its 52-week low of $20.61 on elevated volume (3.0× avg).
Summary
Karat Packaging reported record Q2 2026 results, with net income more than doubling to $29.6 million, driven by a $25.8 million tariff refund and strong operational execution. The dividend was increased to $0.47 per share.
Key Events · Earnings and Guidance · KRT
-
Record Quarterly Sales and Earnings
Net sales reached $136.3M (+9.9% YoY) and net income hit $29.6M (+168.3% YoY), both quarterly records.
-
IEEPA Tariff Refund Boosts Margins
A $25.8M refund of previously paid tariffs was recognized as a reduction in cost of goods sold, lifting gross margin to 56.6% from 39.6% a year ago.
-
Strong Cash Flow Generation
Operating cash flow was $40.3M for the first half of 2026, up 130.9% YoY, driven by higher earnings and the tariff refund.
-
Dividend Increase
Subsequent to quarter-end, the Board declared a quarterly dividend of $0.47 per share, up from $0.45, payable August 28, 2026.
Analysis · KRT · Industrial Applications And Services
Karat Packaging delivered its strongest quarter ever, with net sales rising 9.9% to $136.3 million and net income surging 168% to $29.6 million. The standout was a $25.8 million IEEPA tariff refund that slashed cost of goods sold, pushing gross margin to 56.6% from 39.6% a year ago. Even without the refund, underlying sales growth and margin improvement reflect successful supply chain diversification and pricing power. The company also raised its quarterly dividend to $0.47 per share, signaling confidence in sustained cash generation.
At the time of this filing, KRT was trading at $47.09 on NASDAQ in the Industrial Applications And Services sector, with a market capitalization of approximately $940.1M. The 52-week trading range was $20.61 to $50.00. This filing was assessed with positive market sentiment and an importance score of 8 out of 10.