Lifeway Foods® Delivers Highest Quarterly Net Sales in Company History, Extending Record Growth in Second Quarter 2026
Rhea-AI Summary
Lifeway Foods (Nasdaq: LWAY) reported record second-quarter 2026 net sales of $66.9 million, up 24.1% year-over-year and 6.2% above its prior quarterly record, marking its 27th consecutive quarter of year-over-year net sales growth. First-half 2026 net sales rose 29.9% to $129.9 million.
Second-quarter gross margin declined to 19.5% from 28.6% a year earlier, primarily due to higher milk, resin and transportation costs, and increased marketing spend, resulting in net income of $0.1 million versus $4.3 million last year. Year-to-date net income was $4.8 million, down from $7.8 million in 2025, while operating cash flow reached $4.0 million. The company continues to expand retail and foodservice distribution and is investing heavily in capacity, including the Waukesha expansion targeted for completion in early 2027.
Positive
- Record Q2 2026 net sales of $66.9 million, up 24.1% year-over-year
- 27 consecutive quarters of year-over-year net sales growth
- First-half 2026 net sales $129.9 million, up 29.9% year-over-year
- Operating cash flow of $4.0 million for first-half 2026, up from $3.8 million
- SG&A leverage year-to-date: 17.8% of net sales vs. 18.8% prior year
- Total assets increased to $132.4 million from $105.6 million, reflecting growth investments
Negative
- Q2 2026 gross margin fell to 19.5% from 28.6% year-over-year
- Year-to-date 2026 gross margin declined to 23.4% from 26.4%
- Q2 2026 net income dropped to $0.1 million from $4.3 million
- First-half 2026 net income decreased to $4.8 million from $7.8 million
- Interest expense rose to $0.3 million year-to-date from $0.04 million
- Line of credit borrowings reached $21.9 million alongside $19.5 million in capex for first-half 2026
Market Reaction – LWAY
Following this news, LWAY has declined 14.22%, reflecting a significant negative market reaction. Argus tracked a trough of -2.2% from its starting point during tracking. Our momentum scanner has triggered 10 alerts so far, indicating notable trading interest and price volatility. The stock is currently trading at $25.07. Trading volume is exceptionally heavy at 31.7x the average, suggesting significant selling pressure.
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Key Figures
Historical Context
| Date | Event | Sentiment | 24h Move | Catalyst |
|---|---|---|---|---|
| Jul 30 | Results scheduling | Neutral | -1.4% | Company scheduled second-quarter results and webcast for August 13 |
| Jul 14 | Leadership recognition | Positive | -2.9% | CEO received second consecutive Top Women in Grocery recognition |
| Jun 29 | Product recognition | Positive | +1.8% | Farmer Cheese won a Good Housekeeping 2026 Snack Award |
| Jun 15 | Brand campaign | Positive | +0.2% | Company launched nationwide 40th anniversary and National Kefir Day events |
| May 14 | Secondary offering | Negative | -4.6% | Danone USA priced secondary sale of 3,454,756 existing shares |
24h Move is the share-price change in the day after each event; other market factors may also have contributed.
Recent history showed mixed reactions: positive recognition news diverged once but aligned twice, while the offering aligned negatively.
Key Terms
probiotic medical
deferred income taxes financial
right-of-use asset financial
fair value loss financial
AI-generated analysis. How Rhea-AI works. Not financial advice.
27th consecutive quarter of year-over-year net sales growth; first-half 2026 net sales reach
"Lifeway delivered the highest quarterly net sales in Company history, reaching
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
Second Quarter 2026 Highlights
- Net Sales:
$66.9 million 24.1% year-over-year and6.2% above the prior quarterly record of$63.0 million - Gross Profit Margin:
19.5% , compared to28.6% 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 to17.6% last year, reflecting continued investment in marketing and brand awareness. - Net Income:
$0.1 million $0.01 $4.3 million $0.28
Year-to-Date 2026 Highlights
- Net Sales:
$129.9 million 29.9% year-over-year. - Gross Profit Margin:
23.4% , compared to26.4% in the prior-year period. - Selling, general and administrative expenses were
17.8% of net sales, compared to18.8% last year, reflecting continued investment in marketing and brand awareness. - Net Income:
$4.8 million $0.32 $0.31 $7.8 million $0.51
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 $212.5 million 50.1% . - First-half 2026 net sales of
$129.9 million 29.9% year-over-year and equaled approximately61% of full-year 2025 net sales. - Second-quarter 2026 net sales of
$66.9 million $63.0 million
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
Beyond
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 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. 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 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.
Derek Miller
Vice President of Communications, Lifeway Foods
Email: derekm@lifeway.net
General inquiries:
Lifeway Foods, Inc.
Phone: 847-967-1010
Email: info@lifeway.net
LIFEWAY FOODS, INC. AND SUBSIDIARIES | ||||||||
June 30, 2026 | December 31, | |||||||
(Unaudited) | 2025 | |||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 7,087 | $ | 5,571 | ||||
Accounts receivable, net of allowance for credit losses and discounts & allowances of | 22,861 | 16,643 | ||||||
Inventories, net | 13,987 | 11,890 | ||||||
Prepaid expenses and other current assets | 2,526 | 2,627 | ||||||
Refundable income taxes | 728 | 325 | ||||||
Total current assets | 47,189 | 37,056 | ||||||
Property, plant and equipment, net | 65,596 | 48,282 | ||||||
Operating lease right-of-use asset | 521 | 465 | ||||||
Goodwill | 11,704 | 11,704 | ||||||
Intangible assets, net | 5,548 | 5,818 | ||||||
Other assets | 1,841 | 2,285 | ||||||
Total assets | $ | 132,399 | $ | 105,610 | ||||
Current liabilities | ||||||||
Accounts payable | $ | 17,483 | $ | 11,008 | ||||
Accrued expenses | 4,745 | 5,413 | ||||||
Accrued income taxes | 304 | 218 | ||||||
Total current liabilities | 22,532 | 16,639 | ||||||
Line of credit | 21,945 | – | ||||||
Operating lease liabilities | 393 | 360 | ||||||
Deferred income taxes, net | 2,792 | 2,792 | ||||||
Other long-term liabilities | 163 | – | ||||||
Total liabilities | 47,825 | 19,791 | ||||||
Commitments and contingencies (Note 9) | – | – | ||||||
Stockholders' equity | ||||||||
Preferred stock, no par value; 2,500 shares authorized; none issued | – | – | ||||||
Common stock, no par value; 40,000 shares authorized; 17,274 shares issued; 15,105 | 6,509 | 6,509 | ||||||
Treasury stock, at cost | (17,217) | (13,214) | ||||||
Paid-in capital | 1,800 | 3,843 | ||||||
Retained earnings | 93,482 | 88,681 | ||||||
Total stockholders' equity | 84,574 | 85,819 | ||||||
Total liabilities and stockholders' equity | $ | 132,399 | $ | 105,610 | ||||
LIFEWAY FOODS, INC. AND SUBSIDIARIES | ||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2026 | 2025 | 2026 | 2025 | |||||||||||||
Net sales | $ | 66,893 | $ | 53,901 | $ | 129,905 | $ | 99,992 | ||||||||
Cost of goods sold | 52,859 | 37,669 | 97,600 | 71,923 | ||||||||||||
Depreciation expense | 1,008 | 832 | 1,928 | 1,634 | ||||||||||||
Total cost of goods sold | 53,867 | 38,501 | 99,528 | 73,557 | ||||||||||||
Gross profit | 13,026 | 15,400 | 30,377 | 26,435 | ||||||||||||
Selling expense | 7,634 | 4,718 | 13,822 | 9,416 | ||||||||||||
General and administrative expense | 4,657 | 4,752 | 9,360 | 9,380 | ||||||||||||
Amortization expense | 135 | 135 | 270 | 270 | ||||||||||||
Total operating expenses | 12,426 | 9,605 | 23,452 | 19,066 | ||||||||||||
Income from operations | 600 | 5,795 | 6,925 | 7,369 | ||||||||||||
Other income (expense): | ||||||||||||||||
Interest expense | (215) | (21) | (283) | (35) | ||||||||||||
Fair Value Loss on investments | – | – | – | (20) | ||||||||||||
Gain on sale of investments | – | 55 | – | 3,407 | ||||||||||||
Other income (expense), net | 22 | 82 | 22 | 156 | ||||||||||||
Total other income (expense) | (193) | 116 | (261) | 3,508 | ||||||||||||
Income before provision for income taxes | 407 | 5,911 | 6,664 | 10,877 | ||||||||||||
Provision for income taxes | 280 | 1,662 | 1,863 | 3,088 | ||||||||||||
Net income | $ | 127 | $ | 4,249 | $ | 4,801 | $ | 7,789 | ||||||||
Net earnings per common share: | ||||||||||||||||
Basic | $ | 0.01 | $ | 0.28 | $ | 0.32 | $ | 0.51 | ||||||||
Diluted | $ | 0.01 | $ | 0.28 | $ | 0.31 | $ | 0.51 | ||||||||
Weighted average common shares outstanding: | ||||||||||||||||
Basic | 15,161 | 15,206 | 15,209 | 15,170 | ||||||||||||
Diluted | 15,289 | 15,390 | 15,334 | 15,359 | ||||||||||||
LIFEWAY FOODS, INC. AND SUBSIDIARIES | ||||||||
Six months ended June 30, | ||||||||
2026 | 2025 | |||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 4,801 | $ | 7,789 | ||||
Adjustments to reconcile net income to operating cash flow: | ||||||||
Depreciation and amortization | 2,198 | 1,904 | ||||||
Stock-based compensation | 1,083 | 927 | ||||||
Non-cash interest expense | 11 | 9 | ||||||
Bad debt expense | 87 | – | ||||||
Gain on sale of equipment | (19) | (115) | ||||||
Gain on sale of investments | – | (3,407) | ||||||
Fair value loss on investment | – | 20 | ||||||
(Increase) decrease in operating assets: | ||||||||
Accounts receivable | (6,305) | (640) | ||||||
Inventories | (2,097) | (1,546) | ||||||
Prepaid expenses and other current assets | 297 | 322 | ||||||
Refundable income taxes | (404) | 631 | ||||||
Increase (decrease) in operating liabilities: | ||||||||
Accounts payable | 6,739 | 500 | ||||||
Accrued expenses | (2,601) | (2,632) | ||||||
Accrued income taxes | 86 | – | ||||||
Other long-term liabilities | 163 | – | ||||||
Net cash provided by operating activities | 4,039 | 3,762 | ||||||
Cash flows from investing activities: | ||||||||
Purchases of property and equipment | (19,505) | (4,526) | ||||||
Proceeds from sale of equipment | 223 | 115 | ||||||
Proceeds from sale of investments | – | 5,206 | ||||||
Net cash (used in) provided by investing activities | (19,282) | 795 | ||||||
Cash flows from financing activities: | ||||||||
Purchase of treasury stock | (4,937) | – | ||||||
Borrowings under line of credit | 23,000 | – | ||||||
Repayments under line of credit | (1,000) | – | ||||||
Payment of deferred financing costs | (21) | (65) | ||||||
Equity award settled in cash | (283) | – | ||||||
Net cash provided by (used in) financing activities | 16,759 | (65) | ||||||
Net increase in cash and cash equivalents | 1,516 | 4,492 | ||||||
Cash and cash equivalents at the beginning of the period | 5,571 | 16,728 | ||||||
Cash and cash equivalents at the end of the period | $ | 7,087 | $ | 21,220 | ||||
Supplemental cash flow information: | ||||||||
Cash paid for income taxes, net of (refunds) | $ | 2,180 | $ | 2,457 | ||||
Cash paid for interest | $ | 200 | $ | 26 | ||||
Non-cash investing activities | ||||||||
Accrued purchase of property and equipment | $ | 512 | $ | 1,083 | ||||
Right-of-use assets obtained in exchange for lease obligations | $ | 119 | $ | 196 | ||||
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SOURCE Lifeway Foods, Inc.