US-based beverage and foodservice packaging company Karat Packaging has reported a net income of $6.8m for the first quarter (Q1) of 2025, which is up 5.2% from $6.5m in the same period last year.

Its net income margin in the latest quarter was 6.6%, compared to 6.8% in the same period last year.

For the first quarter ended 31 March 2025, the company posted net sales of $103.6m, up 8.4% from $95.6m in the prior year's quarter.

In the latest quarter, the company reported a gross profit of $40.8m, which also rose by 8.4%, from $37.6m last year.

Its gross margin was 39.3% in Q1 2025, consistent with the prior-year quarter.

In Q1 2025, the company’s adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA) were $11.9m versus $13.5m compared to last year’s quarter. Karat Packaging posted an adjusted EBITDA margin of 11.5% versus 14.2% in the prior-year quarter.

Karat Packaging says that its net sales for this year's second quarter are expected to increase by high single-digits to low double-digits compared to the prior-year quarter.

The company’s gross margin for the second quarter is expected to be in line with the first quarter.

Karat Packaging CEO Alan Yu said: “We delivered another strong quarter, with sales volume up 10.9% and net sales up 8.4% and we believe we are well-positioned to navigate the supply chain challenges and the uncertain trade environment.

“Our effective and nimble global strategic sourcing capabilities enabled us to act early, reducing reliance on China from approximately 20% at the end of 2024 to 15% in March 2025, as we secured inventory from alternative sources with significantly more favourable trade terms under the current tariff structure.

“Moreover, due to the recently imposed extreme tariff, we have temporarily suspended imports from most vendors in China starting mid-April.”