Lifeway Foods Delivers Record Q2 2025 Net Sales, Extends Kefir Category Leadership, and Estimates Over 20% Q3 Net Sales Growth to Date

Rhea-AI Summary

Lifeway Foods (Nasdaq: LWAY) reported exceptional Q2 2025 results with record net sales of $53.9 million, representing an 18% volume-led increase on a comparable basis. The company achieved significant milestones including gross margin expansion of 160 basis points year-over-year to 28.6% and net income of $4.2 million ($0.28 per share).

The momentum continues into Q3 2025, with unaudited net sales reaching $26.4 million through August 11, up over 20% year-over-year. July marked a historic achievement with the highest weekly sales ever recorded, exceeding $5.5 million. The company maintains its long-term target of $45-$50 million in Adjusted EBITDA for FY 2027.

Positive

• Record Q2 net sales of $53.9 million, up 18% on comparable basis
• Gross margin expanded 160 basis points to 28.6% year-over-year
• Net income increased to $4.2 million, with EPS growth to $0.28
• Q3 2025 showing accelerated growth with net sales up over 20% YoY
• Highest weekly sales ever recorded in July 2025, surpassing $5.5 million
• Named Processor of the Year by Dairy Foods magazine

Negative

• SG&A expenses at 17.6% of net sales due to increased marketing and distribution investments

Insights

Financial Analyst

Lifeway delivered record Q2 sales with strong margins and accelerating Q3 momentum, driven by volume growth in kefir products.

Lifeway Foods has delivered another exceptional quarter with record net sales of $53.9 million, representing an impressive 18% volume-led growth on a comparable basis. What's particularly notable is that this performance extends their uninterrupted growth streak to nearly six years, demonstrating remarkable consistency in an otherwise volatile consumer products market.

The 160 basis point year-over-year gross margin expansion to 28.6% is especially impressive, as it shows the company is successfully managing input costs while growing volume. Even more telling is the 460 basis point sequential improvement, indicating accelerating operational efficiency. This margin strength translated directly to the bottom line with net income reaching $4.2 million and diluted EPS of $0.28 per share, compared to $0.25 in the prior year.

The Q3 momentum appears to be building even stronger, with unaudited net sales already reaching $26.4 million through August 11, representing over 20% growth compared to the same period last year. The company's record single-week sales of $5.5 million in July—a staggering 66% increase year-over-year—suggests their growth trajectory is actually accelerating rather than plateauing.

While SG&A expenses remained elevated at 17.6% of sales due to continued marketing and distribution investments, the company's confidence in reiterating its long-term target of $45-50 million in Adjusted EBITDA by FY 2027 indicates these investments are expected to yield sustainable returns. Lifeway appears to be successfully capitalizing on multiple consumer trends simultaneously—probiotics, protein-rich foods, and the emerging connection to GLP-1 medications—which positions them well for continued category leadership and market share gains.

Kefir market leader posts $53.9 million in net sales, an 18% volume-led net sales increase on a comparable basis, marking nearly six years of uninterrupted net sales growth

Company posts double-digit diluted EPS gains and strong gross margin expansion year-over-year

Momentum accelerates into Q3 with highest weekly sales ever recorded in July and unaudited estimate of $26.4 million in net sales for the third quarter-to-date through August 11, up over 20% year-over-year

MORTON GROVE, Ill., Aug. 12, 2025 /PRNewswire/ -- Lifeway Foods, Inc. (Nasdaq: LWAY) ("Lifeway" or "the Company"), the leading U.S. supplier of kefir and fermented probiotic foods, today announced record financial results for the second quarter ended June 30, 2025 and reported that third quarter momentum is already outpacing last year's performance by more than 20%. Unaudited estimated net sales for Q3 to date through August 11, 2025, reached $26.4 million, powered by accelerating consumer demand for the Company's flagship Lifeway Kefir and high-protein Lifeway Farmer Cheese.

"This was another quarter that reinforces Lifeway's position as the undisputed leader in the kefir category," said Julie Smolyansky, President and Chief Executive Officer of Lifeway Foods. "We delivered $53.9 million in net sales, our highest quarter ever, with strong, volume-led growth across our core portfolio. The consistency of our performance, even as we cycle past previous record highs, speaks to the strength of our brand, the loyalty of our customers, and the expanding reach of our platform."

Smolyansky continued, "Beyond topline growth, we expanded gross margin by 160 basis points year-over-year and more than 460 basis points sequentially, translating into double-digit net income and diluted EPS growth year-over-year. We are executing with discipline while capturing powerful consumer tailwinds – from the continued wellness boom to the surge in GLP-1 medication use – as more people seek nutrient-dense, protein-rich, probiotic foods that support digestion, satiety, and natural GLP-1 hormone production."

Recognized Industry Leadership

In July, Lifeway was named Processor of the Year by Dairy Foods magazine, the publication's highest annual honor, recognizing the Company's innovation, leadership, growth, and impact on the dairy industry. "Earning this award is a testament to our team's dedication and to the role Lifeway has played in pioneering kefir in the U.S. for nearly 40 years," Smolyansky said.

Capitalizing on Growth Trends

In addition to its flagship kefir and Farmer Cheese, Lifeway's Probiotic Smoothies with Collagen – the first in the category – are resonating strongly with consumers. Collagen, a rapidly growing $8 billion global market, is valued for its skin, joint, hair, and nail health benefits. Lifeway's innovative blend of probiotics and collagen supports both gut health and "beauty from within," with the Berry Blast flavor recently winning a 2025 Good Housekeeping Snack Award.

Third Quarter Momentum

Momentum has carried into the second half of the year. In July, Lifeway recorded the highest single week of gross sales in Company history, surpassing $5.5 million, representing a 66% increase over the same week in 2024. For Q3 to date through August 11, unaudited net sales were $26.4 million, an increase of more than 20% compared to the same period last year.

Second Quarter 2025 Highlights

• Net Sales: $53.9 million, highest in Company history, up 9.7% year-over-year and approximately 18% on a comparable basis, adjusted for a customer relationship the Company strategically exited in the third quarter of 2024, and a distributor shifting from Lifeway delivered to customer pick-up in late 2024, resulting in lower net sales and lower freight expense.
• Gross Profit Margin: 28.6%, up from 27.0% last year
• SG&A: 17.6% of net sales, reflecting continued investment in marketing and distribution
• Net Income: $4.2 million, or $0.28 per basic and diluted common share, compared to $3.8 million, or $0.26 per basic and $0.25 per diluted share in the prior year

Outlook

The Company reiterated its long-term target of $45–$50 million in Adjusted EBITDA¹ for FY 2027 and expressed confidence in delivering the strongest annual sales in Company history in 2025.

"We are just getting started," Smolyansky concluded. "With record sales, expanding margins, category-leading innovation, and a production platform ready to scale, Lifeway is positioned for sustained, profitable growth. The best is yet to come."

1. Adjusted EBITDA is a non-GAAP financial measure. Adjusted EBITDA is defined as Operating Income, as reported, plus Depreciation and Amortization, plus Stock-Based Compensation.

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 Forbes' Best Small Companies, 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, Ireland, South Africa, United Arab Emirates, and France. 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, the drivers of demand for Lifeway's products, consumer trends, the anticipated effects of scheduled upgrades at the Waukesha plant, expected operating efficiencies and expectations regarding future operating and financial performance. These statements use words, and variations of words, such as "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; customer acceptance of products and services; and uncertainty regarding proposals or other actions taken by shareholders related to the unsolicited proposal made by Danone North America PBC ("Danone") to acquire all of the shares of Lifeway stock that Danone does not already own. 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, 2024. 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: derekm@lifeway.net 

Perceptual Advisors
Dan Tarman
Email: dtarman@perceptualadvisors.com

General inquiries:
Lifeway Foods, Inc.
Phone: 847-967-1010
Email: info@lifeway.net 

LIFEWAY FOODS, INC. AND SUBSIDIARIES Consolidated Balance Sheets June 30, 2025 and December 31, 2024 (In thousands)
		June 30, 2025				December 31,
		(Unaudited)				2024
Current assets
Cash and cash equivalents		$	21,220			$	16,728
Accounts receivable, net of allowance for credit losses and discounts & allowances of  $1,760 and $1,590 at June 30, 2025 and December 31, 2024, respectively			16,065				15,424
Inventories, net			10,224				8,678
Prepaid expenses and other current assets			1,822				2,144
Refundable income taxes			–				631
Total current assets			49,331				43,605
Property, plant and equipment, net			30,731				26,862
Operating lease right-of-use asset			278				118
Goodwill			11,704				11,704
Intangible assets, net			6,088				6,358
Other assets			135				1,900
Total assets		$	98,267			$	90,547
Current liabilities
Accounts payable		$	11,880			$	10,401
Accrued expenses			4,409				5,103
Total current liabilities			16,289				15,504
Operating lease liabilities			220				70
Deferred income taxes, net			3,062				3,062
Total liabilities			19,571				18,636
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; 15,221 and 15,100 outstanding at June 30, 2025 and December 31, 2024, respectively			6,509				6,509
Treasury stock, at cost			(13,268)				(14,052)
Paid-in capital			2,844				4,632
Retained earnings			82,611				74,822
Total stockholders' equity			78,696				71,911
Total liabilities and stockholders' equity		$	98,267			$	90,547

 

LIFEWAY FOODS, INC. AND SUBSIDIARIES Consolidated Statements of Operations For the three and six months ended June 30, 2025 and 2024 (Unaudited) (In thousands, except per share data)
		Three Months Ended June 30,								Six Months Ended June 30,
		2025				2024				2025				2024
Net sales		$	53,901			$	49,157			$	99,992			$	93,791
Cost of goods sold			37,669				35,181				71,923				67,619
Depreciation expense			832				701				1,634				1,362
Total cost of goods sold			38,501				35,882				73,557				68,981
Gross profit			15,400				13,275				26,435				24,810
Selling expense			4,718				3,577				9,416				7,277
General and administrative expense			4,752				4,177				9,380				8,313
Amortization expense			135				135				270				270
Total operating expenses			9,605				7,889				19,066				15,860
Income from operations			5,795				5,386				7,369				8,950
Other income (expense):
Interest expense			(21)				(47)				(35)				(98)
Fair Value Loss on investments			–				–				(20)				–
Gain on sale of investments			55				–				3,407				–
Other income (expense), net			82				20				156				15
Total other income (expense)			116				(27)				3,508				(83)
Income before provision for income taxes			5,911				5,359				10,877				8,867
Provision for income taxes			1,662				1,576				3,088				2,658
Net income		$	4,249			$	3,783			$	7,789			$	6,209
Net earnings per common share:
Basic		$	0.28			$	0.26			$	0.51			$	0.42
Diluted		$	0.28			$	0.25			$	0.51			$	0.41
Weighted average common shares outstanding:
Basic			15,206				14,727				15,170				14,709
Diluted			15,390				15,197				15,359				15,176

 

LIFEWAY FOODS, INC. AND SUBSIDIARIES Consolidated Statements of Cash Flows (Unaudited) (In thousands)
		Six months ended June 30,
		2025				2024
Cash flows from operating activities:
Net income		$	7,789			$	6,209
Adjustments to reconcile net income to operating cash flow:
Depreciation and amortization			1,904				1,632
Stock-based compensation			927				1,296
Non-cash interest expense			9				17
Gain on sale of equipment			(115)				–
Gain on sale of investments			(3,407)				–
Fair value loss on investment			20				–
(Increase) decrease in operating assets:
Accounts receivable			(640)				(651)
Inventories			(1,546)				650
Prepaid expenses and other current assets			322				531
Refundable income taxes			631				(180)
Increase (decrease) in operating liabilities:
Accounts payable			500				(574)
Accrued expenses			(2,632)				(366)
Accrued income taxes			–				(474)
Net cash provided by operating activities			3,762				8,090
Cash flows from investing activities:
Purchases of property and equipment			(4,526)				(3,905)
Proceeds from sale of equipment			115				–
Proceeds from sale of investments			5,206				–
Net cash provided by (used in) investing activities			795				(3,905)
Cash flows from financing activities:
Repayment of note payable			–				(2,750)
Payment of deferred financing costs			(65)				–
Net cash used in financing activities			(65)				(2,750)
Net increase in cash and cash equivalents			4,492				1,435
Cash and cash equivalents at the beginning of the period			16,728				13,198
Cash and cash equivalents at the end of the period		$	21,220			$	14,633
Supplemental cash flow information:
Cash paid for income taxes, net of (refunds)		$	2,457			$	3,312
Cash paid for interest		$	26			$	89
Non-cash investing activities
Accrued purchase of property and equipment		$	1,083			$	106
Right-of-use assets obtained in exchange for lease obligations		$	196			$	–

 

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SOURCE Lifeway Foods, Inc.

FAQ

What were Lifeway Foods (LWAY) Q2 2025 earnings results?

Lifeway Foods reported record Q2 2025 net sales of $53.9 million, with net income of $4.2 million ($0.28 per share) and gross margin of 28.6%.

How much did Lifeway Foods (LWAY) sales grow in Q2 2025?

Lifeway Foods achieved 18% sales growth on a comparable basis, with net sales reaching $53.9 million.

What is Lifeway Foods (LWAY) EBITDA guidance for 2027?

Lifeway Foods maintains a long-term target of $45-$50 million in Adjusted EBITDA for FY 2027.

How is Lifeway Foods (LWAY) performing in Q3 2025?

Q3 2025 is showing strong momentum with net sales of $26.4 million through August 11, up over 20% year-over-year, including record weekly sales exceeding $5.5 million in July.

What awards did Lifeway Foods (LWAY) receive in 2025?

Lifeway Foods was named Processor of the Year by Dairy Foods magazine, the publication's highest annual honor, and their Berry Blast flavor won a 2025 Good Housekeeping Snack Award.