Lifeway Foods (LWAY) investor relations material

Executive summary

• Achieved record quarterly net sales of $66.9 million in Q2 2026, up 24.1% year-over-year, surpassing the previous record by $3.9 million, and marking 27 consecutive quarters of year-over-year net sales growth.

• First half 2026 net sales totaled $129.9 million, up 29.9% year-over-year, representing 61% of full year 2025 net sales.

• Growth driven by higher volumes of flagship Lifeway Kefir and Farmer Cheese, supported by strong consumer trends in protein and digestive health.

• Celebrated 40th anniversary with nationwide marketing campaigns, pop-up events, and digital activations, increasing consumer engagement and brand visibility.

• Expanded distribution and product innovation, including new placements for Muscle Mates, Farmer Cheese, and Kefir Butter across major retailers.

Financial highlights

• Q2 2026 net sales: $66.9 million (+24.1% YoY); H1 2026 net sales: $129.9 million (+29.9% YoY).

• Q2 2026 gross margin: 19.5% (down from 28.6% YoY) due to elevated milk, resin, and packaging costs.

• Q2 2026 net income: $127,000 ($0.01 per share), down from $4.2 million in Q2 2025; H1 2026 net income: $4.8 million.

• SG&A: 18.4% of net sales in Q2 2026; year-to-date SG&A down to 17.8% of net sales.

• Cash and cash equivalents at June 30, 2026: $7.1 million; total assets: $132.4 million.

Outlook and guidance

• Elevated input costs, especially milk and resin-based packaging, expected to remain a headwind in Q3 2026, with relief anticipated in Q4 and full recovery in 2027 as pricing actions and operational improvements take effect.

• Focused on disciplined execution, balancing growth investments with profitability, and leveraging brand momentum for sustained growth.

• Waukesha facility expansion on track for early 2027 completion, expected to double capacity and improve efficiency.