US-based beverage and foodservice packaging company Karat Packaging has reported that its gross profit for fiscal 2022 (FY22) grew by 22.5% to $132.1m, against $107.8m in fiscal 2021 (FY21).
The company registered a gross margin of 31.2% for the fourth quarter (Q4), which ended on 31 December.
Karat Packaging registered full-year net sales of $423.0m, an increase of 16.1% from $364.2m in FY21.
Its net income for the year was $25.8m, up from $22.4m in FY21, while net income attributable to the company was $23.6m.
Karat Packaging’s earnings per diluted share for FY22 were $1.19, up from $1.12 in FY21.
In Q4, the company posted net sales of $92.7m, an increase of 1.5% from $91.3m in the same period of FY21.
The company’s net income for the quarter declined to $4.5m in Q4 2022 from $6.0m a year ago, while net income attributable to Karat in the quarter was $4.5m.
Karat Packaging CEO Alan Yu said: “Net sales grew during the fourth quarter, despite multiple price reductions. Additionally, we added a number of new contracts with chain accounts and expanded our product offerings to existing customers.
“We expect these new agreements to materialise and add to our top line in the second half of 2023. We continue to see solid growth for our eco-friendly product lines, with sales having increased 24% in the most recent fourth quarter over the prior year period, and demand remains strong into 2023.”
In fiscal 2023, Karat Packaging expects its net sales to grow in the high single digit and kept gross margin target of 32-33%.
As part of its growth strategy, the company plans to reduce its manufacturing capacity in California and expand import products with higher margins this year.
It is also considering expanding its sales team by around 35% and entering the US’ East Coast and Midwest regions.