LWAY

This article first appeared on GuruFocus. Release Date: August 13, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Record quarterly net sales of $66.9 million, up 24.1% year-over-year, marking the 27th consecutive quarter of growth. Strong distribution expansion, including Muscle Mates in nearly 800 Walmart locations and new placements at Kroger, Harris Teeter, and Wegmans. Farmer Cheese now available nationwide at Walmart and coming to approximately 450 Target stores this fall, broadening mass market reach. Year-to-date SG&A decreased by 100 basis points as a percentage of net sales, demonstrating operating leverage despite increased brand investment. Strategic capacity investment in the Waukesha facility expansion remains on track for early 2027, positioning for future growth. Gross margin compressed to 19.5% due to elevated milk prices, increased resin costs, and higher transportation expenses. Net income was only $0.1 million ($0.01 per share) in Q2, significantly impacted by input cost inflation. Elevated input costs are expected to remain a headwind in the third quarter, pressuring near-term profitability. SG&A increased to 18.4% of net sales from 17.6% last year, reflecting higher brand building and consumer acquisition costs. Temporary cost pressures from resin and oil-related transportation are tied to geopolitical conflict, adding uncertainty to cost management. Warning! GuruFocus has detected 7 Warning Signs with HRUFF. Is LWAY fairly valued? Test your thesis with our free DCF calculator. Q: What drove the record net sales in the second quarter, and how does this fit into the company's longer-term growth trend?A: Julie Smolyansky, President and CEO, reported that Q2 2026 net sales reached $66.9 million, a 24.1% increase year-over-year, marking the highest quarterly net sales in company history. This represents the 27th consecutive quarter of growth, driven by higher volumes of flagship Lifeway kefir and high-protein farmer cheese. The first half of 2026 alone saw net sales of $129.9 million, up 29.9% year-over-year, which is approximately 61% of the full-year 2025 net sales, demonstrating the durability and repeatability of the company's growth model. Q: What were the primary factors impacting profitability and gross margin in the second quarter?A: Julie Smolyansky explained that gross margin was 19.5% in Q2, with elevated milk prices being the primary headwind. Additionally, there were temporary increases in resin costs for packaging and oil-related transportation costs associated with the Middle East conflict. While these pressures are expected to subside as conditions normalize, the company anticipates elevated input costs to remain a headwind in the third quarter and is evaluating commercial and operational levers to mitigate the impact. Q: How is the company balancing growth investments with profitability, particularly regarding SG&A expenses?A: The CEO noted that SG&A was 18.4% of net sales in Q2, up from 17.6% last year, reflecting continued investment in brand building and consumer acquisition. However, on a year-to-date basis, SG&A decreased by 100 basis points to 17.8% of net sales while first-half net sales increased nearly 30%. This demonstrates operating leverage and shows that investments are generating demand and scaling efficiently, allowing the company to remain profitable despite milk inflation. Q: What are the key distribution wins and new retail placements for Lifeway's products?A: Julie Smolyansky highlighted significant distribution gains, including Muscle Mates now available in nearly 800 Walmart locations, with Kroger adding it this month and Wegmans scheduled for September. Farmer Cheese is newly available nationwide at Walmart and coming to approximately 450 Target stores this fall. Additionally, Target now carries Lifeway kefir butter, and Meijer is adding it in about 270 stores this fall. These placements expand the company's reach and provide multiple avenues to deepen relationships with major retailers. Q: How is Lifeway leveraging cultural events and marketing activations to drive consumer acquisition?A: The CEO discussed activations for National Kefir Day and Lifeway's 40th anniversary in New York, Chicago, Miami, and Los Angeles, featuring custom smoothies, sampling, and high-visibility talent like US soccer star Rosie Lavelle. The company also capitalized on World Cup energy with in-person activations in host cities. Additionally, a viral frozen fruit and kefir ice cream hack generated over 50 million views. These efforts are designed to introduce new consumers to Lifeway, drive trial, and convert cultural attention into retail demand. Q: What is the status of the Waukesha facility expansion and its expected impact?A: Julie Smolyansky confirmed that the Waukesha facility expansion remains on track for completion in early 2027. Once complete, the project is expected to meaningfully increase production capacity, enhance operating efficiency, and give Lifeway greater flexibility to serve growing demand across retail and foodservice. This is described as a strategic investment in the company's next stage of scale. Q: How is Lifeway expanding into new channels beyond traditional grocery retail?A: The company is opening new channels through Cisco on the East Coast, supporting foodservice customers, college campus dining halls, and fast-growing frozen yogurt concepts, including Mimi's in New York and Mykono in Chicago. This strategy is important because it creates trial outside traditional grocery aisles and introduces Lifeway to consumers in new consumption occasions, broadening the brand's reach. Q: What is the company's outlook for the remainder of 2026 given the current cost environment?A: The CEO stated that while near-term dairy inflation is a real headwind being managed with focus and discipline, consumer demand, brand momentum, and retail opportunity remain strong. The company intends to remain disciplined, protecting the long-term health of its brands, supporting retail partners, and balancing growth investments with profitability. Lifeway expects to report third-quarter results in November and remains confident in its ability to sustain growth and build long-term shareholder value. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

$66.9 million in net sales, up 24.1% year-over-year and $3.9 million above the prior quarterly record 27th consecutive quarter of year-over-year net sales growth; first-half 2026 net sales reach $129.9 million, up 29.9% MORTON GROVE, Ill., Aug. 13, 2026 /PRNewswire/ -- Lifeway Foods, Inc. (Nasdaq: LWAY) ("Lifeway" or "the Company"), the leading U.S. supplier of kefir and fermented probiotic foods, today announced financial results for the second quarter ended June 30, 2026. "Lifeway delivered the highest quarterly net sales in Company history, reaching $66.9 million and exceeding our prior record by $3.9 million," said Julie Smolyansky, President and Chief Executive Officer of Lifeway Foods. "Net sales increased 24% year-over-year, on top of a record second quarter in 2025, and marked our 27th consecutive quarter of year-over-year growth. As America's original authentic kefir brand, Lifeway has spent 40 years building the trust, expertise, nationwide distribution and retailer relationships that underpin our category leadership. This sustained, volume-led performance demonstrates the strength of our brands and the repeatability of the consumer-growth platform we have built over nearly seven years." Ms. Smolyansky continued, "Demand remained robust even as elevated milk prices created the primary margin headwind. We view the current margin pressure as temporary and expect these pressures to subside as conditions normalize. Given the Company's pricing power and the positive conventional milk cost outlook for 2027, coupled with the operational efficiencies from our ongoing investments, we expect gross margin and profitability to fully recover in 2027, with the opportunity to exceed the improvement achieved in the first quarter of 2026 as pricing actions layer in and operational improvements take effect. We enter the second half of 2026 with record first-half net sales of $129.9 million, significant new retail and foodservice distribution, and the planned completion of our transformative Waukesha expansion in early 2027. Together, these investments position Lifeway to reinforce its category leadership, serve growing demand and build long-term shareholder value." Second Quarter 2026 Highlights Net Sales: $66.9 million, the highest quarterly net sales in Company history, up 24.1% year-over-year and 6.2% above the prior quarterly record of $63.0 million. Gross Profit Margin: 19.5%, compared to 28.6% in the prior-year period, primarily reflecting elevated milk prices, temporary increases in resin costs for packaging and higher oil-related transportation costs. Selling, general and administrative expenses were 18.4% of net sales, compared to 17.6% last year, reflecting continued investment in marketing and brand awareness. Net Income: $0.1 million, or $0.01 per basic and diluted common share, compared to net income of $4.3 million, or $0.28 per basic and diluted common share, in the prior-year period. Year-to-Date 2026 Highlights Net Sales: $129.9 million, up 29.9% year-over-year. Gross Profit Margin: 23.4%, compared to 26.4% in the prior-year period. Selling, general and administrative expenses were 17.8% of net sales, compared to 18.8% last year, reflecting continued investment in marketing and brand awareness. Net Income: $4.8 million, or $0.32 per basic and $0.31 per diluted common share, compared to net income of $7.8 million, or $0.51 per basic and diluted common share, in the prior-year period. Historic Growth Record 27 consecutive quarters of year-over-year net sales growth – nearly seven years of uninterrupted quarterly growth. Four consecutive years of record annual net sales from 2022 through 2025, increasing from $141.6 million to $212.5 million – a cumulative increase of 50.1%. First-half 2026 net sales of $129.9 million increased 29.9% year-over-year and equaled approximately 61% of full-year 2025 net sales. Second-quarter 2026 net sales of $66.9 million set a new quarterly record, surpassing the previous record of $63.0 million established in the first quarter of 2026. Forty Years of Category Leadership and Cultural Relevance The Company marked its 40th anniversary and National Kefir Day with a nationwide celebration anchored by The Lifeway Kefir Shop, an immersive SoHo pop-up featuring custom smoothies, exclusive merchandise and a VIP preview with U.S. soccer star Rose Lavelle, followed by a live performance from Cannons. Lifeway also brought the celebration into the energy surrounding this summer's global soccer tournament through in-person activations in host cities and an online extension featuring recipes designed for at-home viewing parties. Beyond New York, Lifeway brought sampling and consumer activations to Chicago, Miami and Los Angeles, including a presence at Lollapalooza. The campaign extended digitally through Lifeway's viral frozen-fruit-and-kefir ice cream hack, which generated more than 50 million views and demonstrated Lifeway's ability to convert cultural relevance into broad consumer discovery and retail interest. Expanding Distribution Across Retail and Foodservice Lifeway continues to expand distribution across mass retail, natural grocery and foodservice, gaining momentum with new placements for emerging innovation and established product lines in both national and regional grocers. Recent and upcoming gains are broadening the reach of Lifeway Kefir, Muscle Mates, Kefir Butter, Farmer Cheese and Organic Farmer Cheese to thousands of retail placements nationwide, broadening access to new consumers and increasing consumption occasions. Meanwhile, Lifeway is extending beyond the traditional grocery aisle through our growing foodservice presence, including campus dining and emerging, on-trend frozen yogurt concepts. These wins demonstrate the Company's ability to scale new products, grow legacy offerings and diversify our channels of distribution. Industry Recognition This summer, President and Chief Executive Officer Julie Smolyansky was inducted into the Specialty Food Association Hall of Fame alongside industry leaders and pioneers. The honor recognizes Ms. Smolyansky's leadership in transforming kefir from a niche product into a mainstream functional-food category, driving sustained growth and innovation at Lifeway, advancing consumer understanding of probiotics and gut health, and expanding access to cultured dairy for millions of consumers. Conference Call and WebcastA webcast with Lifeway's President and Chief Executive Officer discussing these results with additional comments and details is available through the "Investor Relations" section of the Company's website at https://lifewaykefir.com/webinars-reports/. About Lifeway Foods, Inc.Lifeway Foods, Inc. is the brand that introduced kefir to generations of American consumers. For 40 years, Lifeway has defined authentic, real kefir in the U.S. market while building the expertise, consumer trust and scale that support its category leadership. The Company has been recognized as one of America's Growth Leaders by TIME, as Dairy Foods' Processor of the Year 2025, as one of Forbes' Best Small Companies and on Inc.'s 2025 Best in Business list in the Best Challenger Brands category. In addition to its drinkable kefir portfolio, Lifeway produces Farmer Cheese – a 40-year legacy line now expanding to mass retail – Kefir Butter, Muscle Mates™, a variety of cheeses and ProBugs® for kids. Lifeway products are sold across the United States, Mexico, the United Arab Emirates, Central America and the Caribbean. Learn more at lifewayfoods.com. Forward-Looking StatementsThis press release contains "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995 regarding, among other things, unaudited estimated net sales. These statements use words, and variations of words, such as "anticipate," "plan," "project," "estimate," "potential," "forecast," "will," "continue," "future," "increase," "believe," "outlook," "expect," and "predict." You are cautioned not to rely on these forward-looking statements. These forward-looking statements are made as of the date of this press release, are based on current expectations of future events and thus are inherently subject to a number of risks and uncertainties, many of which involve factors or circumstances beyond Lifeway's control. If underlying assumptions prove inaccurate or known or unknown risks or uncertainties materialize, actual results could vary materially from Lifeway's expectations and projections. These risks, uncertainties, and other factors include: price competition; the decisions of customers or consumers; the actions of competitors; changes in the pricing of commodities; the effects of government regulation; possible delays in the introduction of new products; and customer acceptance of products and services. A further list and description of these risks, uncertainties, and other factors can be found in Lifeway's Annual Report on Form 10-K for the fiscal year ended December 31, 2025. Copies of these filings are available online at https://www.sec.gov, http://lifewaykefir.com/investor-relations/, or on request from Lifeway. Lifeway expressly disclaims any obligation to update any forward-looking statements (including, without limitation, to reflect changed assumptions, the occurrence of anticipated or unanticipated events or new information), except as required by law. Derek MillerVice President of Communications, Lifeway FoodsEmail: [email protected] General inquiries:Lifeway Foods, Inc.Phone: 847-967-1010Email: [email protected] View original content to download multimedia:https://www.prnewswire.com/news-releases/lifeway-foods-delivers-highest-quarterly-net-sales-in-company-history-extending-record-growth-in-second-quarter-2026-302850391.html

Interested in Lifeway Foods, Inc.? Here are five stocks we like better. Record sales growth continued: Lifeway Foods reported second-quarter net sales of $66.9 million, up 24.1% year over year, marking its 27th consecutive quarter of growth. First-half sales reached $129.9 million, up 29.9%. Profitability faced cost pressure: Gross margin declined amid elevated milk prices, resin costs and transportation expenses, while second-quarter net income was $0.1 million, or $0.01 per share. The company expects some non-dairy cost pressures to ease but sees dairy costs remaining a headwind in the third quarter. Distribution and capacity are expanding: Muscle Mates, Farmer Cheese and Kefir Butter gained placements at major retailers, while Lifeway’s Waukesha facility expansion remains on track for early 2027 to support increased demand and operating flexibility. Lifeway Foods (NASDAQ:LWAY) reported record second-quarter net sales of $66.9 million, up 24.1% from the prior-year period, as higher volumes of its flagship kefir products and high-protein Farmer Cheese supported growth. President and Chief Executive Officer Julie Smolyansky said the quarter marked the company’s 27th consecutive period of year-over-year net sales growth. Sales also exceeded the company’s prior quarterly record, set in the first quarter, by $3.9 million. → AST SpaceMobile Earnings Just Reminded Investors How Risky Space Can Be For the first half of 2026, Lifeway generated net sales of $129.9 million, a 29.9% increase year over year. Smolyansky said the first-half total represented about 61% of Lifeway’s full-year 2025 net sales of $212.5 million. Lifeway’s second-quarter gross margin was 19.5%, with elevated milk prices cited as the primary headwind. The company also experienced temporary increases in resin costs for packaging and oil-related transportation costs associated with the conflict in the Middle East. → Nebius’ Q2 Beat Shows the AI Bottleneck Is Capacity, Not Demand Smolyansky said Lifeway expects the additional resin and transportation pressures to subside as conditions normalize, though elevated dairy costs are expected to remain a headwind during the third quarter. Second-quarter selling, general and administrative expenses represented 18.4% of net sales, compared with 17.6% a year earlier, reflecting brand-building and consumer-acquisition investments. On a year-to-date basis, SG&A fell 100 basis points as a percentage of sales to 17.8%, according to the company. → On Holding's Price Stumble May Be an Opening for a Company Built to Run Lifeway reported second-quarter net income of $0.1 million, or $0.01 per basic and diluted share. Smolyansky said milk inflation compressed near-term profitability, but the company remained profitable while continuing to fund growth initiatives. The company highlighted new and expanded retail distribution for products including Muscle Mates, Farmer Cheese and Kefir Butter. Muscle Mates, a beverage containing creatine, protein and probiotics, is available in nearly 800 Walmart locations. Kroger added Muscle Mates during the month, while Harris Teeter added the product along with a limited-edition kefir offering during the summer. Wegmans is scheduled to add Muscle Mates in September. Busch’s is adding the full Muscle Mates lineup and all three Lifeway Kefir Butter varieties. Farmer Cheese is now available nationwide at Walmart and is expected to arrive in about 450 Target stores during the fall. Target carries Lifeway Kefir Butter, while Meijer plans to add it in about 270 stores in the fall. Big Y added the butter during the month. Smolyansky said the new placements broaden Lifeway’s reach and create additional opportunities to deepen relationships with major retailers. The company is focusing on replenishment and product velocity as it works to convert distribution gains into repeat purchases. Lifeway used National Kefir Day and its 40th anniversary to conduct consumer activations in New York, Chicago, Miami and Los Angeles. The events included sampling, custom smoothies, merchandise and talent appearances. U.S. soccer player Rose Lavelle attended a VIP preview at the company’s New York anniversary event, where Cannons performed. The company also cited activations tied to Lollapalooza and a frozen fruit and kefir ice cream social-media trend that it said generated more than 50 million views. Smolyansky said Lifeway is expanding creator relationships and producing content designed to direct consumer interest toward retail purchases. “The objective was bigger than a one-day celebration,” Smolyansky said of the anniversary effort. “Honor four decades of category leadership, introduce new consumers to Lifeway, drive trial, and turn cultural attention into retail demand.” Lifeway said its Waukesha facility expansion remains on track for completion in early 2027. The company expects the project to increase production capacity, improve operating efficiency and provide greater flexibility to support demand from retail and food-service customers. The company is also expanding food-service distribution through Sysco on the East Coast, supporting customers including college dining halls and frozen-yogurt concepts. Smolyansky said the channel expansion can create product trial outside traditional grocery aisles and introduce Lifeway products in additional consumption occasions. Looking ahead, Smolyansky said the company’s priorities include attracting new consumers, gaining shelf space, increasing product velocity and converting current consumer interest into repeat buying. She said Lifeway continues to see demand supported by consumer interest in protein, digestive health and functional nutrition, including among GLP-1 users seeking nutrient-dense foods. Lifeway Foods, Inc (NASDAQ: LWAY) is a Chicago-based food company specializing in probiotic-rich cultured dairy products. Established in 1986 by Michael Smolyansky, the company pioneered the introduction of kefir to the U.S. market. Under the leadership of CEO Julie Smolyansky, who succeeded her father in 2002, Lifeway has grown from a single product operation into a diversified portfolio of fermented foods and beverages aimed at promoting digestive health and wellness. The company's flagship product is kefir, a cultured milk beverage naturally rich in probiotics, vitamins and minerals. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Lifeway Foods Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

Download the Complete Report Here Key Takeaways: Top-line beat was driven by stronger-than-expected contribution from Arps Dairy’s milk processing operations, supporting continued revenue scale-up. BRFH’s 1Q26 revenue increased 92% y/y to $5.6 million from $2.9 million in 1Q25, exceeding management’s $5.0-$5.2 million guidance range. The upside was driven by stronger-than-anticipated contribution from Arps Dairy’s raw and processed milk business, which expanded the consolidated revenue base but carries a lower margin profile than BRFH’s core frozen beverage and food products. Profitability reflected the transitional nature of the model shift, with gross margin pressure partly offset by opex discipline and a narrower adjusted EBITDA loss. Gross margin declined to 18% in 1Q26 from 31% in 1Q25, driven by Arps Dairy’s lower-margin milk processing contribution and startup costs associated with producing in the newly acquired processing facility. Adjusted EBITDA improved to a loss of $238,000 from a loss of $506,000 y/y, but came in below prior breakeven expectations because revenue mix was more heavily weighted toward lower-margin milk processing than anticipated and production volumes through the acquired facility were lower than planned. Net loss improved to $661,000 from $761,000 y/y, indicating that revenue scale and cost discipline are beginning to narrow losses, though not yet enough to fully offset integration costs and facility ramp inefficiencies. Arps Dairy remains the central strategic initiative as it gives BRFH production control, improves customer credibility, and creates the manufacturing base needed to support a larger institutional platform. The Arps processing facility supported ~50% of BRFH’s frozen beverage and food volume in 1Q26, while the company continued to use co-manufacturers for some product during the transition. We view this as a staged internalization process rather than a completed transition, with current inefficiencies tied to equipment ramp-up, installation timing, training, and lower-than-planned production volumes through the owned facility. The strategic benefit is that owned production gives BRFH greater control over availability, timing, and execution, reducing reliance on third-party co-manufacturers while strengthening its ability to pursue larger school districts and foodservice accounts that require dependable supply at scale. The larger 44,000-square-foot Defiance facility remains on track for commissioning before year-end 2026 and should provide the step-change in throughput, flexibility, and unit economics needed for the next phase of growth. BRFH continues to procure and install equipment and personnel at the larger Ohio facility, supported by a $2.4 million government grant for specialized equipment and the $7.5 million senior convertible note financing completed in March 2026. The financing allowed BRFH to pay off the existing mortgage on the facility and own it free and clear, while management expects to evaluate mortgage and equipment financing against the unencumbered facility to support growth objectives and potentially repay a portion of the convertible note. Customer recovery and large-district momentum reinforce demand visibility in the core education channel, where supply reliability is often as important as product adoption. Education remains BRFH’s primary focus and greatest near-term opportunity, with tangible progress rebuilding customer relationships and adding new school district wins during 1Q26. The broker network and direct sales team have been communicating manufacturing progress and improved supply reliability to districts, and that message appears to be gaining traction. The 7-year award with the fifth largest school district in the U.S. remains a key validation point, demonstrating that BRFH can compete for large-scale procurement contracts where compliance, operational simplicity, and dependable fulfillment are central decision criteria. More importantly for the current quarter, bid season remains active and the company is progressing on customer reactivation as prior supply constraints ease. BRFH’s 2026 priorities remain centered on completing the manufacturing transition, rebuilding education demand, and expanding the long-term revenue base. The immediate focus is commissioning the new manufacturing facility before year-end 2026, which should improve production efficiency, capacity, and supply reliability. In parallel, the company is rebuilding and expanding its education customer base following prior supply disruptions, while beginning to evaluate adjacent opportunities in foodservice, convenience, and other channels as capacity increases. Longer term, the expanded facility could also support co-manufacturing revenue once operations are stabilized, adding a potential incremental growth stream beyond BRFH’s core branded education business. 2026 remains a transition year, with revenue growth and EBITDA conversion weighted to the back half. Management introduced 2Q26 revenue guidance of $5.2-$5.6 million, representing more than 200% growth versus the prior-year period, and expects an adjusted EBITDA loss of $0.3-$0.2 million as the company continues progressing through manufacturing transition and facility optimization. At the midpoint, 2Q26 revenue of $5.4 million would be roughly in line with 1Q26 revenue of $5.6 million, but the y/y comparison remains strong because 2Q25 was seasonally weak for the legacy Barfresh business. The company reiterated 2026 revenue guidance of $28-$32 million, representing 97%-125% growth versus 2025, and adjusted EBITDA guidance of $3.2-$3.8 million, implying profitability should improve meaningfully in 2H26 as school-year demand, production efficiency, and product mix improve. Illustrative 2027 outlook highlights significant operating leverage potential, driven by new customer opportunities. Based on illustrative figures presented in BRFH’s investor presentation (not to be interpreted as formal guidance), management outlined a potential pathway to ~$70 million in revenue by 2027 (vs. ~$28-32 million base in 2026), driven by $40 million+ incremental contribution from new customer opportunities under discussion. This potential is contingent on conversion of current discussions and incremental capital deployment to support capacity expansion. Working capital remains thesis-relevant because seasonal school demand requires inventory readiness and dependable service levels. As of March 31, 2026, BRFH had approximately $4.1 million of cash and accounts receivable and approximately $1.8 million of inventory, modestly above the ~$1.7 million level at year-end 2025. The inventory build appears constructive if it supports back-to-school readiness and customer reactivation, though cash conversion should be monitored as production transitions and demand ramps through 2H26. Our analysis suggests BRFH remains undervalued relative to its growth profile, manufacturing transition, and potential EBITDA inflection. The following analysis is illustrative in nature and does not constitute a price target or investment recommendation. We assess valuation using a combination of absolute, time-series, and relative peer-based approaches to frame potential re-rating as revenue growth, gross margin recovery, and profitability improve. BRFH currently trades at a discount to both its historical trading range and relevant peers, despite a step-change in revenue growth and a guided profitability inflection. Based on management guidance, BRFH is positioned to deliver approximately 111% revenue growth in 2026E at the midpoint of the guidance range, alongside adjusted EBITDA of approximately $3.5 million. This outlook is supported by improved supply reliability, reactivation of education accounts, facility optimization, and incremental daypart expansion, dynamics that do not appear fully reflected in the current multiple. At present, BRFH trades at 1.32x 2026E P/Sales, representing a meaningful discount to its one-year mean of 2.25x and well below its one-year peak multiple of 3.92x. We believe re-rating potential will increasingly depend on execution against measurable operational milestones, including sustained revenue growth through the school-year ramp, continued gross margin recovery from the 18% level reported in 1Q26, improved production efficiency as transition costs normalize, and achievement of positive adjusted EBITDA during 2026. Demonstrated supply reliability, successful customer re-engagement in education, commissioning of the 44,000-square-foot Defiance facility, and progress toward higher utilization of the vertically integrated manufacturing platform could support valuation convergence toward peer and historical benchmarks. Download the Complete Report Here Read Exec Edge’s Initiation on Barfresh Food Group Here Subscribe to our Weekly Newsletter to Receive All Research Contact: Executives-Edge.com [email protected]

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Achieved record net sales of $63 million, representing a 36.7% year-over-year surge driven entirely by volume-led expansion in core drinkable kefir and farmer cheese. Gross profit margin expanded by 360 basis points to 27.5%, attributed to manufacturing efficiencies from higher volumes and favorable conventional milk pricing. Performance was bolstered by the convergence of health trends, specifically rising gut-health awareness and demand from GLP-1 users seeking nutrient-dense, probiotic foods. Management noted that 2025 distribution gains and improved shelf assortments have created more challenging year-over-year comparisons as the company begins to lap those periods. Strategic marketing investments resulted in a 300 basis point leverage in SG&A as a percentage of revenue, indicating high returns on brand-building and influencer initiatives. The company is successfully transitioning from a dairy product to a lifestyle brand through high-profile athletic partnerships and viral social media content generating over 10 million views. The Waukesha facility expansion remains on track for completion by the end of 2026, with full operational benefits expected to materialize in Q1 2027. Anticipated Q1 2027 facility launch is expected to materially increase production capacity, improve operational efficiencies, and grow the regional workforce. Management plans to expand the reach of new 'Muscle Mates' and 'Kefir Butter' products across the dairy landscape following positive initial retailer feedback. Strategic entry into the premium pet food category via the 'GoodGut' partnership with Open Farm aims to capitalize on the humanization of pet nutrition trends. Ongoing dialogues with major retail partners are focused on securing incremental distribution wins, such as the recent Costco twin-pack expansion. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Benefited from updated USDA food pyramid guidelines that now include full-fat dairy and fermented foods, providing government-backed validation for the core portfolio. The company is navigating a transition period where it must lap significant prior-year distribution gains, placing higher reliance on organic velocity growth. Operational focus is heavily concentrated on the Midwest as the primary hub for kefir manufacturing following the Waukesha upgrades.

This article first appeared on GuruFocus. Release Date: May 14, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Lifeway Foods Inc (NASDAQ:LWAY) achieved record-breaking net sales of $63 million in the first quarter of 2026, marking a 36.7% year-over-year increase. The company reported a significant gross profit margin expansion to 27.5%, up 360 basis points from the previous year. Net income for the first quarter rose to $4.7 million, a 32% increase compared to the same period last year. Lifeway Foods Inc (NASDAQ:LWAY) continues to benefit from strong consumer trends towards health-conscious eating, particularly in the areas of gut health and probiotic foods. The company is expanding its product offerings and market reach, including innovative partnerships such as the one with Open Farms for a premium pet food line. Selling, general, and administrative expenses increased by 16.8% from the prior year, reflecting higher marketing and brand-building costs. The company faces challenging year-over-year comparisons due to its consistent growth streak, which may pressure future performance metrics. Despite strong sales, the company is still in the process of completing its Waukesha facility expansion, which is not expected to be fully operational until Q1 2027. Lifeway Foods Inc (NASDAQ:LWAY) is heavily reliant on consumer trends and health awareness, which could shift and impact demand for its products. The company's marketing and promotional efforts, while effective, require significant investment, which could impact profitability if not managed carefully. Warning! GuruFocus has detected 3 Warning Sign with SBC. Is LWAY fairly valued? Test your thesis with our free DCF calculator. Q: Can you elaborate on the factors driving the 36.7% year-over-year increase in net sales for Q1 2026? A: Julie Smolyansky, CEO, explained that the increase was entirely volume-led, driven by the flagship Lifeway kefir and high-protein Lifeway pharma cheese. The growth was supported by significant distribution gains and improved shelf assortments achieved in the previous year. Q: What contributed to the 360 basis point increase in gross profit margin? A: The CEO attributed the margin expansion to robust volume increases in core Lifeway branded offerings, enhanced manufacturing efficiency from ongoing facility upgrades, and favorable conventional milk pricing. Q: How is the Waukesha facility expansion progressing, and what impact will it have? A: Julie Smolyansky stated that the expansion is on track for completion by the end of the year. Once fully operational in Q1 2027, it will significantly increase production capacity, improve operational efficiencies, and establish the Midwest as a key manufacturing hub. Q: Can you discuss the strategic importance of the partnership with Open Farms? A: The CEO highlighted that the partnership introduces Lifeway into the pet nutrition category, leveraging their expertise in cultured dairy and probiotics. This collaboration aims to meet the growing consumer demand for pet health and nutrition. Q: What are the key marketing strategies contributing to Lifeway's growth? A: Julie Smolyansky emphasized the effectiveness of strategic collaborations, experiential marketing, and digital campaigns. These initiatives have driven consumer trial, increased brand recognition, and positioned Lifeway as a lifestyle brand. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Achieves $63.0 million in net sales, a 37% volume-led net sales increase, driven by the Company's flagship Lifeway Kefir Record-breaking results signal robust Kefir & Farmer Cheese growth, supported by the widening consumer focus on protein-rich, probiotic foods Significant gross profit margin expansion of 360 basis points and net income growth of 32% reflect the Company's disciplined operational execution MORTON GROVE, Ill., May 14, 2026 /PRNewswire/ -- Lifeway Foods, Inc. (Nasdaq: LWAY) ("Lifeway" or "the Company"), the leading U.S. supplier of kefir and fermented probiotic foods, today announced financial results for the first quarter ended March 31, 2026. "We kicked off 2026 with a blowout quarter that demonstrates the extraordinary momentum we've built across our business," said Julie Smolyansky, President and Chief Executive Officer of Lifeway Foods. "We far exceeded our previous record with net sales of $63.0 million, up 37% year-over-year, surpassing sixty million in quarterly net sales for the first time and marking our 26th consecutive quarter of year-over-year growth. This exceptional top-line performance was accompanied by sizeable gross margin expansion of 360 basis points year-over-year, and equally strong net income growth of 32% that reflects a clean flow-through from our significant sales growth down to the bottom line. We are investing meaningfully behind our core products to support our rapid growth, and we continue to see impressive velocity acceleration. We also leveraged our SG&A by 300 basis points this quarter, demonstrating the increasing return and effectiveness of our investments." Ms. Smolyansky continued, "We believe Lifeway is uniquely positioned at the intersection of numerous consumer tailwinds with our on-trend, functional product offerings. The consumer focus on health and wellness continues to increase, gut-health awareness is spreading and demand from GLP-1 users seeking nutrient-dense, probiotic foods is particularly strong. We address each of these trends with our flagship Lifeway Kefir and high-protein Lifeway Farmer Cheese, while continuing to build a pipeline of innovative products, including Muscle Mates™ with creatine and probiotic Kefir Butter™. Together, these offerings bring new excitement to the category and expand our reach across the cultured dairy landscape. We are very excited about our trajectory and confident in our ability to execute throughout 2026 as we further capitalize on the growing consumer demand in our space." First Quarter 2026 Highlights Net Sales: $63.0 million, up 36.7% year-over-year. Gross Profit Margin: 27.5%, up 360 basis points from 23.9% last year. Selling, general and administrative expenses were $10.9 million, up 16.8% from last year, reflecting continued investment in marketing and brand awareness. Net Income: $4.7 million, or $0.31 per basic and $0.30 per diluted common share, compared to a net income of $3.5 million, or $0.23 per basic and diluted common share in the prior year. Expanding Lifeway Visibility Lifeway recently announced strategic partnerships, experiential marketing initiatives, and product innovation designed to elevate the brand's visibility and engage health-conscious consumers nationwide. The Company partnered with Erewhon to launch the Tropical Lifeway Smoothie, made with Organic Lifeway Kefir, offering the ultimate summer refreshment reminiscent of a creamy frozen lemonade while delivering the added benefits of probiotics and protein. The Company hosted a retro-inspired Wellness House in Palm Springs during festival weekend, bringing together media, influencers, tastemakers and wellness enthusiasts for a celebration of Lifeway's legacy and continued role in shaping the modern wellness conversation. The Company celebrated forty years of Kefir leadership with new cultured dairy innovations at Expo West 2026, showcasing its Lifeway Muscle Mates™ and Lifeway Kefir Butter™. Outlook The Company reiterated its long-term target of $45–$50 million in Adjusted EBITDA1 for FY 2027 and believes it is well positioned to deliver the strongest annual sales in Company history in FY 2026. "Our momentum continues to build as we drive sustainable, profitable growth across the business," Smolyansky concluded. "We have laid a foundation for durable, long-term value creation, and believe the investments we are making today in manufacturing capacity, marketing and innovation position us exceptionally well to capitalize on the tremendous opportunities ahead." Conference Call and Webcast A webcast with Lifeway's President and Chief Executive Officer discussing these results with additional comments and details is available through the "Investor Relations" section of the Company's website at https://lifewaykefir.com/webinars-reports/. About Lifeway Foods, Inc. Lifeway Foods, Inc., which has been recognized as one of America's Growth Leaders by TIME, as Dairy Foods' Processor of the Year 2025, one of Forbes' Best Small Companies and named to Inc.'s 2025 Best in Business list in the Best Challenger Brands category, is America's leading supplier of the probiotic, fermented beverage known as kefir. In addition to its line of drinkable kefir, the Company also produces a variety of cheeses and a ProBugs® line for kids. Lifeway's tart and tangy fermented dairy products are now sold across the United States, Mexico, United Arab Emirates, Central America and the Caribbean. Learn how Lifeway is good for more than just you at lifewayfoods.com. Forward-Looking Statements This press release contains "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995 regarding, among other things, unaudited estimated net sales. These statements use words, and variations of words, such as "anticipate," "plan," "project," "estimate," "potential," "forecast," "will," "continue," "future," "increase," "believe," "outlook," "expect," and "predict." You are cautioned not to rely on these forward-looking statements. These forward-looking statements are made as of the date of this press release, are based on current expectations of future events and thus are inherently subject to a number of risks and uncertainties, many of which involve factors or circumstances beyond Lifeway's control. If underlying assumptions prove inaccurate or known or unknown risks or uncertainties materialize, actual results could vary materially from Lifeway's expectations and projections. These risks, uncertainties, and other factors include: price competition; the decisions of customers or consumers; the actions of competitors; changes in the pricing of commodities; the effects of government regulation; possible delays in the introduction of new products; and customer acceptance of products and services. A further list and description of these risks, uncertainties, and other factors can be found in Lifeway's Annual Report on Form 10-K for the fiscal year ended December 31, 2025. Copies of these filings are available online at https://www.sec.gov, http://lifewaykefir.com/investor-relations/, or on request from Lifeway. Lifeway expressly disclaims any obligation to update any forward-looking statements (including, without limitation, to reflect changed assumptions, the occurrence of anticipated or unanticipated events or new information), except as required by law. Non-GAAP Financial Measures This press release refers to Adjusted EBITDA, which is a financial measure that has not been prepared in accordance with U.S. Generally Accepted Accounting Principles ("GAAP"), and may exclude items that are significant to understanding and assessing financial results. This non-GAAP measure is provided to enhance investors' overall understanding of the Company's financial performance. Non-GAAP financial measures should be considered as supplements to GAAP measures reported, should not be considered replacements for, or superior to, GAAP measures reported and may not be comparable to similarly named measures used by other companies. The Company's calculation of non-GAAP financial measures may differ from methods used by other companies. We are unable to reconcile our target fiscal year 2027 Adjusted EBITDA to projected net income, the most directly comparable projected GAAP financial measure, because certain information necessary to calculate such measures on a GAAP basis is unavailable or dependent on the timing of future events outside of our control. Due to this uncertainty, the Company cannot reconcile target fiscal year 2027 Adjusted EBITDA to the nearest GAAP financial measure without unreasonable effort. Derek Miller Vice President of Communications, Lifeway Foods Email: [email protected] Perceptual Advisors Dan Tarman Email: [email protected] General inquiries: Lifeway Foods, Inc. Phone: 847-967-1010 Email: [email protected] View original content to download multimedia:https://www.prnewswire.com/news-releases/lifeway-foods-announces-record-breaking-results-for-the-first-quarter-ended-march-31-2026-302771741.html