2023-08-14 14:04:43 ET
Lifeway Foods ( NASDAQ: LWAY ) rallied on Monday after cruising past consensus estimates with its Q2 earnings report . Revenue rose 17.1% year-over-year during the quarter to $39.2M. The sales increase was noted to be primarily driven by higher volumes of the branded drinkable kefir product, and to a lesser extent the impact of price increases implemented during Q4 of 2022.
Gross profit as a percentage of sales was 28.7% for the quarter, compared to 17.0% a year go. The 1,170 basis point increase was primarily due to the higher volumes of branded products and the favorable impact of milk pricing, and to a lesser extent the price increases implemented during Q4 of 2022 and decreased transportation costs. Net income soared during the quarter to $3.2M vs. $0.1M a year ago. EPS of $0.21 topped the consensus expectation of $0.06 and was much higher than the $0.01 mark from a year ago.
CEO update: "Our proactive operating discipline, along with easing inflationary pressures, have recently allowed us to further reap the benefits of our consistent topline expansion as our gross profit margin increased 1,170 basis points year-over-year and 710 basis points quarter-over-quarter. Alongside the improving profitability, our impressive net sales growth of 17.1%, Lifeway's 15th consecutive quarter of year-over-year growth, reflects another meaningful increase in volumes and the wide customer acceptance of inflation-justified price increases."
Lifeway Foods ( LWAY ) ended the quarter with a cash position of $7.45M vs. $4.44M a year ago. Inventory at the end of the quarter was roughly the same as a year ago at $9.67M.
During the earnings call, LifeWay Foods ( LWAY ) pointed out that it recently gained distribution at roughly 140 CVS stores, which is a new retail partner for the company. Lifeway ( LWAY ) products have been placed in the premium set in CVS' West Coast stores.
Shares of Lifeway Foods ( LWAY ) were up 17.30% at 2:03 p.m. on Monday, Earlier in the session, the health food stock broke over $8.00 for the first time in nearly a year.
More on Lifeway Foods:
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- Growth metrics on Lifeway Foods
- Lifeway Foods earnings call transcript
- Seeking Alpha's Quant Rating for Lifeway Foods
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Lifeway Foods rips 17% gain after earnings dazzle