Lifeway Foods (LWAY) Q3 2026 earnings summary

Executive summary

• Record Q3 net sales were $67.797M, up 18.6% YoY and marking the 28th consecutive quarter of growth; 9M sales rose 25.8% to $197.702M.

• Q3 net income fell to $260K from $3.529M, and gross margin declined to 18.0% from 28.7% amid elevated input costs.

• 2026 net sales are expected to exceed the 2025 record of $212.5M.

• Ranked No. 45 on Fortune’s 2026 list of America’s 100 fastest-growing companies.

Financial highlights

• Q3 gross profit was $12.164M versus $16.408M; operating income was $1.085M versus $5.040M.

• 9M net income was $5.061M versus $11.318M; operating income was $8.010M versus $12.409M.

• Q3 diluted EPS was $0.02 versus $0.23; 9M diluted EPS was $0.33 versus $0.74.

• 9M operating cash flow was $4.937M versus $10.681M; investing cash outflow was $22.324M, primarily reflecting facility expansion and modernization.

Outlook and guidance

• Q4 gross margin is expected between Q2 and Q3 levels; milk costs are expected higher than Q3, with packaging, ingredient and transportation costs remaining elevated.

• Portfolio price increases begin rolling out in Q4 2026, with some customer increases taking effect in Q1 2027; pricing and Waukesha productivity are expected to support 25%+ gross margins.

• Waukesha increased-scale manufacturing and packaging are expected to begin in Q1 2027, with project completion expected in Q2; line speed is expected to more than double from 200 bottles per minute.

• Capacity constraints are expected to persist in Q4 and slightly into Q1 2027; most of 2027 is expected to operate at full capacity, serving pent-up demand and supporting distribution growth.

• Pricing actions and productivity gains are expected to improve profitability in 2027; management sees record-setting potential but gave no quantified growth forecast.