Lifeway Foods sales jump 37% as probiotic demand hits record high

Lifeway Foods (NASDAQ:LWAY) reported a surge in first-quarter revenue that far outpaced analyst estimates, extending a multi-year growth streak fueled by the mainstreaming of gut-health products.

The kefir pioneer also boosted its profitability, leveraging increased scale and premium product launches to offset rising investments in brand marketing.

Lifeway Foods reported record net sales of $63 million for the quarter ended March 31, 2026, representing a 36.7% increase over the same period last year.

The results mark the 26th consecutive quarter of year-over-year growth for the company, as consumer interest in fermented dairy and functional probiotics continues to expand beyond specialty health channels into conventional grocery.

Net income for the quarter rose 32% to $4.7 million, or $0.30 per diluted share, up from $3.5 million in the prior-year period.

Profitability was aided by a significant expansion in gross margin, which climbed 360 basis points to 27.5%.

Management attributed the margin gains to operational efficiencies and a favorable shift toward higher-margin products, including its Farmer Cheese line.

To sustain this momentum, Lifeway increased its selling, general, and administrative (SG&A) spending by 16.8% to $10.9 million.

Much of this capital was directed toward experiential marketing and new product development.

The company recently debuted Muscle Mates™, a protein-enriched probiotic beverage, and Probiotic Kefir Butter™ at Expo West 2026, targeting the intersection of the performance nutrition and functional spreads markets.

Looking ahead, the company reiterated its long-term financial targets, including an adjusted EBITDA goal of $45 million to $50 million by fiscal year 2027.