Lifeway Foods Inc. announced its net sales were $37.9 million for the first quarter ended March 31, 2023, an increase of $3.8 million or 11.2% from the same period of 2022. The net sales increase was primarily driven by higher volumes of its branded drinkable kefir and the impact of price increases implemented during the fourth quarter of 2022.
Gross profit as a percentage of net sales was 21.7% for the first quarter ended March 31, 2023, compared to 16.4% in the same period of 2022. The 530-basis point increase versus the prior year was primarily due to the impact of price increases implemented during the fourth quarter of 2022 and higher volumes of our branded product, and to a lesser extent the favorable impact of milk pricing and favorable transportation costs.
"Following our record fiscal year 2022, I am very pleased to announce our momentum continued into the first quarter of 2023 with our 14th consecutive quarter of strong year-over-year topline expansion," said Julie Smolyansky, President and CEO of Lifeway Foods. "The net sales growth of 11.2% reflects meaningfully positive volumes accompanied by increased pricing, which illustrates our expanded reach and the loyalty of our consumers who are searching for premium, better-for-you offerings. Further, our gross profit margin increased 530 basis points year-over-year, an important metric that highlights our incredible focus and fiscal discipline. I believe Lifeway is poised to capitalize as macro trends encourage consumers to look for high quality products at an exceptional value, and in the first quarter of 2023, this market trend has been confirmed by the accelerating unit velocities of our core kefir line. We made marketing investments in both retail and branding initiatives in the first quarter that showed positive results and we will continue to build upon those successes in 2023. This year, we will further explore options for productivity and profitability optimizations through advanced promotions software and AI-powered marketing and operations tools. These emergent technologies will support the progress toward our goal of increasing access to Lifeway's best-in-class offerings and growing shareholder value as we reach more consumers through distribution and marketing efforts."