Lifeway Foods, Inc. (NASDAQ:LWAY) Q2 2023 Earnings Conference Call August 14, 2023 9:00 AM ET

Company Participants

Julie Smolyansky - President and Chief Executive Officer

Operator

Good morning. Welcome to Lifeway Foods Second Quarter 2023 Earnings Conference Call. On the call with me today is Julie Smolyansky, President and Chief Executive Officer.

By now, everyone should have access to the press release that went out this morning. If you have not received the release, it is available on the Investor Relations portion of Lifeway's website at www.lifewayfoods.com. A recording of this call will be available on the company's website.

Before we begin, we would like to remind everyone that the prepared remarks contain forward-looking statements. The words believes, expect, anticipate and other similar expressions generally identify forward-looking statements. These statements do not guarantee future performance, and therefore, undue reliance should not be placed on them. Actual results could differ materially from those projected in any forward-looking statements. Lifeway assumes no obligation to update any forward-looking projections that may be made in today's release or call. All of the forward-looking statements contained herein speak only as of the date of this call.

And with that, I'd like to turn the call over to Lifeway's Chief Executive Officer, Julie Smolyansky.

Julie Smolyansky

Thank you, John, and good morning to everyone joining us today. As always, we greatly appreciate your interest in Lifeway Foods. I am thrilled to report yet another brilliant quarter for our business today. Yet before I detail the great results, I'd like to give thanks to the entire Lifeway team whose devotion and seamless execution have allowed us to perform for our customers and partners so remarkably so far in 2023.

With that, I will now review our second quarter 2023 results, highlighted by our largest ever recorded net sales and very positive gross margin expansion. Net sales were $39.2 million for the period ended June 30, 2023, an increase of $5.7 million or 17.1% compared to the second quarter in 2022. The net sales increased, our 15th consecutive quarter of strong year-over-year growth was primarily driven by higher volumes of our branded drinkable kefir and to a lesser extent, the impact of price increases implemented during the fourth quarter of 2022. This net sales growth is particularly impressive as we continue to lap some strong quarters of our record-setting 2022. And when we compare to the second quarter of 2021, our net sales were up 34.5%. This value-driven growth accompanied by continued accelerating unit velocities in our core kefir line is encouraging as it once again illustrates the wide acceptance of our inflation-justified price increases by our loyal and new consumers focused on high-quality, better-for-you offerings.