Lifeway Foods® Reports Record High Quarterly Net Sales, Extends Kefir Category Leadership in Third Quarter 2026

Rhea-AI Summary

Lifeway Foods (Nasdaq: LWAY) reported record third-quarter net sales of $67.8 million, extending its year-over-year growth streak to 28 quarters. Sales rose 18.6%, primarily on higher branded drinkable kefir volumes. Gross margin fell to 18.0% from 28.7% as input costs increased. Net income declined to $260,000, or $0.02 per diluted share, from $3.529 million, or $0.23.

Nine-month sales rose 25.8% to $197.7 million, while net income fell to $5.061 million from $11.318 million. At September 30, cash was $6.975 million, with a $11.950 million credit line balance and $12.032 million note payable. Lifeway expects cost pressure through the fourth quarter, with price increases rolling through early 2027. It expects gross margin expansion and improved profitability in 2027, supported by pricing and capacity investments. Its Waukesha expansion is scheduled for completion in early 2027.

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0 major · 12 points

Hollow bars mark forward-looking points. How the balance works

Positive

• Moderate pointThird-quarter sales rose 18.6% to $67.8 million, primarily driven by higher branded drinkable kefir volumes.
• Moderate point. Forward-looking: it has not happened yet and may not happen.Nine-month sales increased 25.8% to $197.7 million; Lifeway expects record annual sales in 2026.
• Moderate point. Forward-looking: it has not happened yet and may not happen.Portfolio price increases are expected to roll out through year-end and the first quarter of 2027.
• Moderate point. Forward-looking: it has not happened yet and may not happen.2027 gross margin expansion and improved profitability are expected from pricing actions and anticipated productivity gains.
• Minor point28 consecutive quarters of year-over-year sales growth followed four record annual sales years from 2022 through 2025.

5 minor points

• Minor pointThird-quarter general and administrative expense fell to $4.510 million from $6.186 million year over year.
• Minor pointNine-month general and administrative expense fell to $13.870 million from $15.566 million year over year.
• Minor pointSelling, general and administrative expenses as a share of sales fell to 16.2% quarterly and 17.2% year-to-date.
• Minor pointCash increased to $6.975 million at September 30, 2026, from $5.571 million at December 31, 2025.
• Minor point. Forward-looking: it has not happened yet and may not happen.Waukesha capacity expansion is scheduled for early 2027 completion; Lifeway expects it to eliminate capacity challenges.

Negative

• Moderate pointThird-quarter gross margin fell to 18.0% from 28.7% year over year, reflecting elevated input costs.
• Moderate pointThird-quarter net income fell to $260,000 from $3.529 million; basic and diluted EPS declined to $0.02 from $0.23.
• Moderate pointNine-month gross margin fell to 21.5% from 27.3% in the prior-year period.
• Moderate pointNine-month net income fell to $5.061 million from $11.318 million; diluted EPS fell to $0.33 from $0.74.
• Moderate pointCredit line debt of $11.950 million and note payable of $12.032 million replaced zero balances at year-end 2025.
• Moderate point. Forward-looking: it has not happened yet and may not happen.Elevated input cost pressure is expected to persist in the fourth quarter.

6 minor points

• Minor pointThird-quarter operating income declined to $1.085 million from $5.040 million a year earlier.
• Minor pointNine-month operating income declined to $8.010 million from $12.409 million a year earlier.
• Minor pointThird-quarter selling expense increased to $6.434 million from $5.047 million year over year.
• Minor pointNine-month selling expense increased to $20.256 million from $14.463 million year over year.
• Minor pointThird-quarter interest expense increased to $340,000 from $21,000 in the prior-year period.
• Minor pointNine-month interest expense increased to $623,000 from $56,000 in the prior-year period.

Key Figures

Third-quarter net sales: $67.8 million; up 18.6% year-over-year Third-quarter gross profit margin: 18.0% vs. 28.7% Third-quarter net income: $0.3 million vs. $3.5 million +3 more

Third-quarter net sales

$67.8 million; up 18.6% year-over-year

Record quarterly net sales

Third-quarter gross profit margin

18.0% vs. 28.7%

Third quarter 2026 vs. prior-year period

Third-quarter net income

$0.3 million vs. $3.5 million

Third quarter 2026 vs. prior-year period

Diluted earnings per share

$0.02 vs. $0.23

Third quarter 2026 vs. prior-year period

Year-to-date net sales

$197.7 million; up 25.8% year-over-year

Nine months ended September 30, 2026

Year-to-date net income

$5.1 million vs. $11.3 million

Nine months ended September 30, 2026 vs. prior-year period

Historical Context

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1. Aug 13

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   Record Q2 sales growth alongside lower gross margin and net income; shares fell 15.47%.

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28th consecutive quarter of year-over-year net sales growth; year-to-date 2026 net sales up 25.8%

MORTON GROVE, Ill., Nov. 12, 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 third quarter ended September 30, 2026.

"Lifeway delivered another record breaking quarter with net sales of $67.8 million, extending our streak of topline growth to 28 consecutive quarters," said Julie Smolyansky, President and Chief Executive Officer of Lifeway Foods. "The consistent, volume-led growth we are seeing for our authentic Lifeway Kefir and Lifeway Farmer Cheese is extraordinary, reflecting the deep trust we have established with our growing consumer base and the ongoing commitment of our retailer partners. Our performance also reflects the rising demand for fermented dairy, as consumers increasingly seek functional, high quality-protein offerings and retailers identify ways to dedicate more shelf space to products like ours. With 7 years of uninterrupted growth and decades spent building this category, Lifeway is uniquely positioned to meet the moment and capitalize on this demand."

Ms. Smolyansky continued, "Profitability this quarter continued to reflect an elevated input cost environment, and while we expect the cost pressure to persist in the fourth quarter, our outlook for 2027 has not changed. We expect the planned price increases across our portfolio to take effect with distributors and retailers on a rolling basis through the end of the year and into the first quarter of 2027. With our pricing actions and the productivity gains we anticipate from our capacity investments, we expect gross margin expansion and improved profitability in 2027. The scale-up of our Waukesha facility, scheduled for completion in early 2027, will eliminate capacity challenges we have encountered and allow us to serve the massive level of demand in front of us. We are well on pace to shatter our annual net sales record in 2026, and look forward to extending our category leadership and building on this momentum as we look ahead to 2027."

Third Quarter 2026 Highlights

• Net Sales: $67.8 million, the highest quarterly net sales in Company history, up 18.6% year-over-year, primarily driven by higher volumes of the Company's branded drinkable kefir.
• Gross Profit Margin: 18.0%, compared to 28.7% in the prior-year period, primarily reflecting elevated input costs including milk, resin-based packaging, ingredients, and transportation costs.
• Selling, general and administrative expenses were 16.2% of net sales, compared to 19.6% last year, reflecting continued investment in marketing and brand awareness.
• Net Income: $0.3 million, or $0.02 per basic and diluted common share, compared to net income of $3.5 million, or $0.23 per basic and diluted common share, in the prior-year period.

Year-to-Date 2026 Highlights

• Net Sales: $197.7 million, up 25.8% year-over-year.
• Gross Profit Margin: 21.5%, compared to 27.3% in the prior-year period.
• Selling, general and administrative expenses were 17.2% of net sales, compared to 19.1% last year.
• Net Income: $5.1 million, or $0.33 per basic and diluted common share, compared to net income of $11.3 million, or $0.75 per basic and $0.74 per diluted common share, in the prior-year period.

Historic Growth Record

• 28 consecutive quarters of year-over-year net sales growth, reflecting 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%.
• Year-to-date net sales equaled approximately 93% of full-year 2025 net sales, with the Company well on pace to set a record high in annual net sales in 2026, far exceeding the high-bar set in 2025.

Industry Recognition

In October, Lifeway was named to Fortune's 2026 list of the 100 Fastest-Growing Companies, ranking No. 45, reflecting the Company's sustained, volume-led growth and the strength of consumer demand for kefir and other cultured dairy products. This inclusion places Lifeway among an elite group of publicly traded companies that have delivered notably strong financial performance. This follows the induction of President and Chief Executive Officer Julie Smolyansky into the Specialty Food Association Hall of Fame this summer, in recognition of her leadership in transforming kefir from a niche product into a mainstream functional-food category.

Conference Call and Webcast
A live conference call and Q&A session with management discussing these results with additional comments and details will be made available through the "Investor Relations" section of the Company's website at https://lifewaykefir.com/webinars-reports/ at 4:30 p.m. ET on November 12, 2026. Those interested in participating in the live call can dial 1-877-407-9716 or 1-201-493-6779. The webcast will be archived and available for replay.

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
Unaudited Consolidated Balance Sheets
September 30, 2026 and December 31, 2025
(In thousands)
		September 30,				December 31,
		2026				2025
		(Unaudited)
Current assets
Cash and cash equivalents		$	6,975			$	5,571
Accounts receivable, net of allowance for credit losses and discounts & allowances of      $2,900 and $1,730 at September 30, 2026 and December 31, 2025, respectively			22,353				16,643
Inventories, net			13,594				11,890
Prepaid expenses and other current assets			2,470				2,627
Refundable income taxes			636				325
Total current assets			46,028				37,056
Property, plant and equipment, net			67,393				48,282
Operating lease right-of-use asset			504				465
Goodwill			11,704				11,704
Intangible assets, net			5,413				5,818
Other assets			1,629				2,285
Total assets		$	132,671			$	105,610
Current liabilities
Accounts payable		$	12,739			$	11,008
Accrued expenses			6,363				5,413
Accrued income taxes			716				218
Total current liabilities			19,818				16,639
Line of credit			11,950				–
Note payable			12,032				–
Operating lease liabilities			370				360
Deferred income taxes, net			2,792				2,792
Other long-term liabilities			251				–
Total liabilities			47,213				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; 15,108      and 15,232 outstanding at September 30, 2026 and December 31, 2025,      respectively			6,509				6,509
Treasury stock, at cost			(17,194)				(13,214)
Paid-in capital			2,401				3,843
Retained earnings			93,742				88,681
Total stockholders' equity			85,458				85,819
Total liabilities and stockholders' equity		$	132,671			$	105,610

 

LIFEWAY FOODS, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
For the three and nine months ended September 30, 2026 and 2025
(Unaudited)
(In thousands, except per share data)
		Three Months Ended September 30,								Nine Months Ended September 30,
		2026				2025				2026				2025
Net sales		$	67,797			$	57,143			$	197,702			$	157,135
Cost of goods sold			54,599				39,821				152,199				111,744
Depreciation expense			1,034				914				2,962				2,548
Total cost of goods sold			55,633				40,735				155,161				114,292
Gross profit			12,164				16,408				42,541				42,843
Selling expense			6,434				5,047				20,256				14,463
General and administrative expense			4,510				6,186				13,870				15,566
Amortization expense			135				135				405				405
Total operating expenses			11,079				11,368				34,531				30,434
Income from operations			1,085				5,040				8,010				12,409
Other income (expense):
Interest expense			(340)				(21)				(623)				(56)
Fair Value Loss on investments			–				–				–				(20)
Gain on sale of investments			–				–				–				3,407
Other income (expense), net			20				73				42				229
Total other income (expense)			(320)				52				(581)				3,560
Income before provision for income taxes			765				5,092				7,429				15,969
Provision for income taxes			505				1,563				2,368				4,651
Net income		$	260			$	3,529			$	5,061			$	11,318
Net earnings per common share:
Basic		$	0.02			$	0.23			$	0.33			$	0.75
Diluted		$	0.02			$	0.23			$	0.33			$	0.74
Weighted average common shares outstanding:
Basic			15,107				15,229				15,174				15,190
Diluted			15,253				15,422				15,314				15,381

 

LIFEWAY FOODS, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
		Nine months ended September 30,
		2026				2025
Cash flows from operating activities:
Net income		$	5,061			$	11,318
Adjustments to reconcile net income to operating cash flow:
Depreciation and amortization			3,367				2,953
Stock-based compensation			1,708				1,466
Non-cash interest expense			16				14
Bad debt expense			87				–
Gain on sale of equipment			(17)				(115)
Gain on sale of investments			–				(3,407)
Fair value loss on investment			–				20
(Increase) decrease in operating assets:
Accounts receivable			(5,797)				(1,997)
Inventories			(1,704)				(2,378)
Prepaid expenses and other current assets			354				123
Refundable income taxes			(311)				497
Increase (decrease) in operating liabilities:
Accounts payable			2,413				3,330
Accrued expenses			(988)				(1,143)
Accrued income taxes			497				–
Other long-term liabilities			251				–
Net cash provided by operating activities			4,937				10,681
Cash flows from investing activities:
Purchases of property and equipment			(22,757)				(9,675)
Proceeds from sale of equipment			433				115
Proceeds from sale of investments			–				5,206
Net cash (used in) provided by investing activities			(22,324)				(4,354)
Cash flows from financing activities:
Purchase of treasury stock			(4,937)				–
Borrowings under line of credit			25,000				–
Repayments under line of credit			(13,000)				–
Proceeds from note payable			12,032				–
Payment of deferred financing costs			(21)				(65)
Equity award settled in cash			(283)				–
Net cash provided by (used in) financing activities			18,791				(65)
Net increase in cash and cash equivalents			1,404				6,262
Cash and cash equivalents at the beginning of the period			5,571				16,728
Cash and cash equivalents at the end of the period		$	6,975			$	22,990
Supplemental cash flow information:
Cash paid for income taxes, net of (refunds)		$	2,181			$	4,154
Cash paid for interest		$	511			$	42
Non-cash investing activities
Accrued purchase of property and equipment		$	93			$	3,875
Right-of-use assets obtained in exchange for lease obligations		$	135			$	293

 

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SOURCE Lifeway Foods, Inc.

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

What were Lifeway Foods' third-quarter 2026 sales and earnings?

Lifeway reported $67.8 million in sales, up 18.6% year over year, and net income of $260,000. Basic and diluted earnings were $0.02 per share, compared with $0.23 in the prior-year quarter.

What does Lifeway Foods expect for profitability in 2027?

Lifeway expects gross margin expansion and improved profitability in 2027 from pricing actions and anticipated productivity gains from capacity investments. Price increases are expected to take effect on a rolling basis through year-end and the first quarter of 2027, with the Waukesha scale-up scheduled for completion in early 2027.