Overview

• US kefir and probiotic foods maker's Q1 net sales rose 37% year-over-year

• Gross profit margin expanded by 360 basis points to 27.5%

• Net income grew 32% to $4.7 mln, reflecting operational execution

Outlook

• Company reiterated long-term target of $45–$50 mln adjusted EBITDA for FY 2027

• Lifeway expects to deliver strongest annual sales in company history in FY 2026

• Company says consumer demand for protein-rich, probiotic foods remains strong

Result Drivers

• FLAGSHIP PRODUCT DEMAND - Co said net sales growth was driven by strong volume gains in Lifeway Kefir and Farmer Cheese

• CONSUMER HEALTH TRENDS - Co cited increased consumer focus on health, wellness, and gut health, as well as demand from GLP-1 users for nutrient-dense, probiotic foods

• OPERATIONAL EXECUTION - Co attributed gross margin expansion and net income growth to disciplined operational execution and SG&A leverage

Company press release: ID:nPn979jxRa

Key Details

Metric	Beat/Miss	Actual	Consensus Estimate
Q1 Sales		$63 mln	$60.80 mln (1 Analyst)
Q1 EPS		$0.30
Q1 Net Income		$4.67 mln

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 2 "strong buy" or "buy", no "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the food processing peer group is "buy"

• Wall Street's median 12-month price target for Lifeway Foods Inc is $34.50, about 26.6% above its May 13 closing price of $27.25

• The stock recently traded at 21 times the next 12-month earnings vs. a P/E of 18 three months ago

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