Lifeway Foods (NASDAQ:LWAY) Releases Quarterly Earnings Results, Misses Expectations By $0.25 EPS

Lifeway Foods (NASDAQ:LWAY) posted its quarterly earnings results on Thursday. The company reported $0.01 earnings per share (EPS) for the quarter, missing the consensus estimate of $0.26 by ($0.25), FiscalAI reports. The business had revenue of $66.89 million during the quarter, compared to the consensus estimate of $61.40 million. Lifeway Foods had a net margin of 6.54% and a return on equity of 17.76%.

Here are the key takeaways from Lifeway Foods’ conference call:

• Record sales continued: Second-quarter net sales rose 24.1% year over year to $66.9 million, marking the 27th consecutive quarter of growth. First-half sales increased 29.9% to $129.9 million, led by Lifeway Kefir and Farmer Cheese.
• Profitability was pressured by inflation: Gross margin fell to 19.5% amid elevated milk prices, higher resin costs, and oil-related transportation expenses. Second-quarter net income was only $0.1 million, or $0.01 per share, and management expects dairy costs to remain a headwind in the third quarter.
• Distribution is expanding: Muscle Mates, Farmer Cheese, Kefir Butter, and other products secured additional placements at Walmart, Kroger, Target, Wegmans, Meijer, and regional retailers, while new food-service channels are broadening consumer trial opportunities.
• Capacity investments support future growth: The Waukesha facility expansion remains on track for completion in early 2027, which management expects will increase production capacity, improve efficiency, and provide flexibility to serve rising retail and food-service demand.

Lifeway Foods Price Performance

Shares of NASDAQ:LWAY traded up $1.68 on Friday, hitting $26.38. The company’s stock had a trading volume of 166,949 shares, compared to its average volume of 113,509. The company has a market capitalization of $403.04 million, a PE ratio of 26.82 and a beta of 0.44. The company has a debt-to-equity ratio of 0.08, a current ratio of 2.14 and a quick ratio of 1.56. The company has a 50-day simple moving average of $28.96 and a 200 day simple moving average of $25.03. Lifeway Foods has a 1 year low of $17.31 and a 1 year high of $34.20.

Wall Street Analyst Weigh In

A number of research analysts recently weighed in on LWAY shares. Weiss Ratings upgraded shares of Lifeway Foods from a “hold (c+)” rating to a “buy (b-)” rating in a research note on Tuesday, July 28th. Benchmark reaffirmed a “buy” rating on shares of Lifeway Foods in a report on Monday, June 15th. Two investment analysts have rated the stock with a Buy rating, Based on data from MarketBeat.com, the company currently has a consensus rating of “Buy” and a consensus price target of $35.00.

Insider Activity

In related news, major shareholder Edward Smolyansky sold 111,548 shares of the company’s stock in a transaction that occurred on Friday, June 26th. The shares were sold at an average price of $29.26, for a total value of $3,263,894.48. Following the transaction, the insider directly owned 902,642 shares in the company, valued at approximately $26,411,304.92. This represents a 11.00% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through the SEC website. Also, major shareholder Ludmila Smolyansky sold 100,000 shares of the firm’s stock in a transaction that occurred on Wednesday, July 22nd. The shares were sold at an average price of $30.11, for a total transaction of $3,011,000.00. Following the completion of the sale, the insider directly owned 507,207 shares in the company, valued at $15,272,002.77. This represents a 16.47% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Insiders have sold 482,698 shares of company stock valued at $14,155,717 in the last three months. 18.58% of the stock is owned by insiders.

Institutional Inflows and Outflows

Hedge funds and other institutional investors have recently added to or reduced their stakes in the stock. Susquehanna Portfolio Strategies LLC purchased a new stake in Lifeway Foods during the fourth quarter valued at about $258,000. Tudor Investment Corp ET AL boosted its holdings in shares of Lifeway Foods by 73.0% in the 4th quarter. Tudor Investment Corp ET AL now owns 163,361 shares of the company’s stock worth $3,958,000 after purchasing an additional 68,956 shares in the last quarter. Millennium Management LLC increased its position in shares of Lifeway Foods by 266.3% during the 4th quarter. Millennium Management LLC now owns 57,545 shares of the company’s stock valued at $1,394,000 after purchasing an additional 41,836 shares during the last quarter. Man Group plc bought a new position in shares of Lifeway Foods during the 4th quarter valued at about $206,000. Finally, Inspire Investing LLC raised its holdings in shares of Lifeway Foods by 18.5% during the 4th quarter. Inspire Investing LLC now owns 19,585 shares of the company’s stock valued at $475,000 after buying an additional 3,062 shares in the last quarter. 36.39% of the stock is currently owned by hedge funds and other institutional investors.

About Lifeway 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.