Lifeway Foods (NASDAQ:LWAY) reported a record first quarter of 2026, with President and Chief Executive Officer Julie Smolyansky saying the company exceeded the high end of its preliminary outlook issued in April and extended its sales growth streak to 26 consecutive quarters.
Smolyansky said net sales reached $63 million, crossing the $60 million threshold for the first time and rising 36.7% from the prior-year period. She described the growth as “entirely volume-led,” driven by the company’s flagship Lifeway Kefir and high-protein Lifeway Farmer Cheese products.
Margins Expand as Volume Growth Supports Efficiency
Lifeway reported a gross profit margin of 27.5% for the quarter, up from 23.9% a year earlier, representing a 360-basis-point improvement. Smolyansky attributed the expansion to higher volumes in Lifeway-branded products, improved manufacturing efficiency and favorable conventional milk pricing during the period.
The company also pointed to ongoing upgrades at its Waukesha facility as a contributor to improved efficiency. Smolyansky said the facility expansion remains on track for completion by the end of 2026, with the full initiative expected to come online in the first quarter of 2027.
Once complete, she said the project is expected to “materially increase production capacity, improve operational efficiencies, grow our workforce, and further establish the Midwest as the country’s center for kefir manufacturing.”
Selling, general and administrative expenses totaled $10.9 million, up 16.8% from the prior year. As a percentage of revenue, however, SG&A improved by 300 basis points, which Smolyansky said reflected strong returns from marketing and brand-building investments.
Net income rose to $4.7 million, or $0.31 per basic share and $0.30 per diluted share, compared with $3.5 million, or $0.23 per basic and diluted share, in the year-ago quarter. The increase represented 32% growth in net income.
Core Kefir and Farmer Cheese Products Lead Growth
Smolyansky said Lifeway’s performance continues to be supported by consumer demand for functional nutrition, digestive health and nutrient-dense foods. She cited rising awareness of gut health and demand among GLP-1 users for probiotic foods that support digestive health and satiation as important tailwinds.
She also said the company received validation from government nutrition guidance, noting that full-fat dairy was included in the updated USDA Food Pyramid and that kefir was included in supporting documents, which she said underscored the importance of fermented foods and digestive health.
The company’s drinkable kefir remains the “bellwether” of the business, Smolyansky said, while Lifeway Farmer Cheese continues to grow as the company expands its reach and encourages trial. She said those products, along with new offerings, are helping Lifeway capitalize on consumer interest in functional nutrition.
Product Innovation and New Category Expansion
Lifeway also highlighted several product and partnership initiatives during the call. Smolyansky said the company received positive feedback for Lifeway Muscle Mates and Kefir Butter at Expo West in March and plans to present the products to a wider group of retailers and consumers.
In addition, Lifeway announced a partnership with Open Farm, incorporating Lifeway ingredients into a premium pet food line called GoodGut. Smolyansky said the companies collaborated to formulate Canine Culture, a blend of probiotic strains that also includes prebiotic fiber and postbiotic elements to support pets’ gut microflora.
“The expanding consumer emphasis on health extends beyond humans,” Smolyansky said, adding that the partnership brings Lifeway into a new category where it can apply its cultured dairy and probiotic expertise to pet nutrition.
Marketing Efforts Focus on Trial and Brand Awareness
The company said it continues to invest in collaborations, experiential marketing and digital campaigns to build awareness and encourage trial. Smolyansky pointed to a recent partnership with Erewhon to launch the Tropical Lifeway Smoothie, made with organic Lifeway Kefir. The smoothie is available through the end of June at all Erewhon locations.
She also discussed a retro-inspired wellness house hosted in Palm Springs during festival weekend to mark Lifeway’s 40th anniversary. The event featured media, influencers, tastemakers and Lifeway fans, along with performances by Debbie Gibson and Autograf and a menu of high-protein, probiotic-focused foods.
On digital platforms, Smolyansky said Lifeway’s advertising campaign with Chicago football players Colston Loveland and D’Andre Swift generated more than 10 million views across social media after launching in February. She said the company is also expanding its influencer network and using nutrition information and recipes to connect with consumers.
Retail Expansion Remains a Priority
Smolyansky said Lifeway continues to allocate marketing spending toward retail programs designed to drive product velocities and engage consumers during the shopping journey. She described the company’s retail relationships as “robust” and said Lifeway recently expanded its Costco presence in select markets with a new twin pack of plain Lifeway Kefir.
The company is continuing discussions with major retail partners as it seeks additional distribution opportunities across channels aligned with its growth strategy, she said.
Smolyansky said the first-quarter results marked an “extraordinary launch to 2026,” citing record sales, gross margin expansion and bottom-line growth. She said Lifeway’s ongoing investments in sales and marketing, innovation and manufacturing capacity are intended to support a growing customer base, gain share and capitalize on category trends.
About Lifeway Foods (NASDAQ:LWAY)
Lifeway Foods, Inc (NASDAQ: LWAY) is a Chicago-based food company specializing in probiotic-rich cultured dairy products. Established in 1986 by Michael Smolyansky, the company pioneered the introduction of kefir to the U.S. market. Under the leadership of CEO Julie Smolyansky, who succeeded her father in 2002, Lifeway has grown from a single product operation into a diversified portfolio of fermented foods and beverages aimed at promoting digestive health and wellness.
The company’s flagship product is kefir, a cultured milk beverage naturally rich in probiotics, vitamins and minerals.
