#United States #Lifeway Foods #Morton Grove #Kefir #probiotic

Lifeway Foods Reports Significant First Quarter Growth

Lifeway Foods, Inc. (NASDAQ: LWAY), a prominent supplier of kefir and probiotic products in the U.S., has announced impressive results for the first quarter ending March 31, 2025. The company reported earnings per share (EPS) soaring by 44% year-over-year, with net sales amounting to $46.1 million—a 3.3% increase compared to the same period last year. This marks Lifeway’s 22nd consecutive quarter of sales growth, validating its resilient market position amidst increasing consumer demand for health-focused products.

A Strong Start to 2025

Julie Smolyansky, President and CEO of Lifeway Foods, expressed her excitement regarding the company's Q1 performance, which reflects a continuation of the growth momentum established in 2024. The results are particularly noteworthy considering the previous year's remarkable growth of 18% in the same quarter. Smolyansky credited several strategic adjustments the company made, including the decision to prioritize branded offerings over private label products, which ultimately led to an enhancement of profit margins.

Lifeway’s dedication to its core products, especially its flagship drinkable Lifeway Kefir, has been instrumental in achieving these favorable outcomes. The brand's leadership in the probiotic segment is not only about maintaining existing customers but also about expanding its reach. Lifeway's products are now making their way into broader retail channels, reflecting the growing consumer interest in high-nutrient options.

Financial Highlights

The financial highlights from the first quarter of 2025 include:

• - Net Sales: $46.1 million, a $1.5 million increase from $44.6 million in Q1 2024.
• - Gross Profit: 24.0% of net sales.
• - Net Income: $3.5 million, translating to $0.23 per share for both basic and diluted shares.

The year-on-year growth demonstrates the effective execution of Lifeway's business strategy and its loyal customer base's ongoing support. The company has also adjusted its distribution model, opting for direct pickups by distributors, which has not only reduced freight costs but also helped streamline operations.

Market Factors and Consumer Trends

The ongoing focus on health and wellness appears to be a significant factor driving Lifeway's sales increases. With consumers increasingly leaning towards protein-rich and probiotic foods, Lifeway is in an advantageous position to benefit from these trends. Products like Lifeway's Kefir and Farmer Cheese have seen heightened market interest, showcasing their alignment with current health trends.

Lifeway is increasingly recognized for its investments in branding and marketing that bolster its presence in a competitive landscape. The company anticipates that consumer engagement will rise as shoppers actively seek nutritious foods and beverages that support their health goals. This approach is proving particularly effective with the influx of consumers utilizing GLP-1 medications who are in search of natural foods that promote gut health.

Continued Growth and Distribution Expansion

Looking ahead, Lifeway Foods is set on capitalizing on its growth trajectory. The company has secured commitments for over 2,000 additional points of distribution across various retailers for its product lines. Moreover, Lifeway has made significant strides by placing its products in 40 airports nationwide, catering to traveling consumers.

In a record week recently, Lifeway surpassed $5 million in gross sales, primarily driven by its popular Kefir and Farmer Cheese. This milestone is indicative of the brand's solidifying reputation and the increasing demand for its offerings.

As we enter the second quarter of 2025, Lifeway Foods remains committed to investing behind its core branded products, ensuring they continue to meet the expectations of health-conscious consumers while exploring new market opportunities and expanding its reach.

The company is confident in its ability to achieve an Adjusted EBITDA of between $45 million to $50 million by FY2027. Lifeway Foods continues to position itself as a trailblazer in the probiotic space, paving the way for a promising future in health-oriented markets.