Karat Packaging (KRT) reports earnings tomorrow: what to expect

What happened

Karat Packaging, a foodservice packaging supplier, is scheduled to report earnings Thursday after market hours. Last quarter, it reported revenue of $136.3 million, up 9.9% year on year, and beat analysts’ revenue, earnings per share, and EBITDA expectations. Analysts expect revenue to grow 12.7% this quarter.

Confirmed

Global impact / market context

The report will show whether sales growth is accelerating as analysts expect. Revenue above or below that forecast could change views of demand for Karat’s packaging and its ability to sustain growth; earnings results will also indicate whether costs are keeping pace with sales.

Analyst inference

Analysts generally reconfirmed their estimates during the 30 days before the report, indicating little recent change to their expectations. The article also notes that Karat has missed revenue estimates multiple times in the past two years, while some peers have reported growth.

Confirmed

What to watch

1. Compare reported revenue with the expected 12.7% year-on-year growth rate; the result will indicate whether sales growth is meeting the forecast or falling short. Analyst inference
2. Check earnings per share and EBITDA, a measure of operating performance, against analysts’ expectations to see whether costs are limiting gains from higher sales. Analyst inference
3. Watch the company’s explanation of demand and its outlook; any change could lead analysts to revise sales expectations and investors to reassess the growth outlook. Analyst inference

Evidence

• stockstory.org