Joshua Axel's questions to Karat Packaging Inc (KRT) leadership • Q2 2025
Question
Joshua Axel from UBS inquired about the growth outlook for the online sales channel in the second half of 2025 and sought commentary on the current M&A landscape and the company's acquisition strategy.
Answer
CEO Alan Yu stated that online sales are expected to continue growing, driven by new platforms like the Cisco Marketplace. He noted a strategic shift away from Amazon FBA, which slightly lowered revenue but significantly improved margins and inventory control, and projected a return to double-digit online growth in Q4. On M&A, Mr. Yu commented that while the company is actively looking, valuations in the packaging space remain high. He emphasized that Carrot's M&A focus is on strategic acquisitions that add new locations, client bases, or product lines, and that the company is also exploring partnerships and joint ventures.