Lifeway Foods Inc. filed a definitive proxy statement (DEFN14A) on December 5, 2025 that nominates Edward Smolyansky and George Sent for election to the board and calls for the separation of the CEO and chair roles. The filing also seeks to add four new independent directors, a move that would further dilute the current leadership’s influence and address long‑standing governance concerns raised by the Smolyansky family.
The proxy follows a cooperation agreement with Danone North America that was announced in late September 2025. That agreement already required the appointment of three independent directors by October 30 and a fourth by November 14, and it mandated the separation of the CEO and chair positions. Smolyansky argues that the agreement fell short of fully removing entrenched leadership and that the remaining board members continue to prioritize self‑preservation over shareholder value.
Financially, Lifeway reported Q3 2025 net sales of $57.1 million, a 24% year‑over‑year increase that set a new record for the company. Gross margin expanded to 28.7%, up three percentage points from the prior quarter, driven by higher pricing power in the kefir and probiotic‑drink segments and disciplined cost management. Earnings per share were $0.23, slightly below the consensus estimate of $0.24—a miss of $0.01 or 4%. The miss reflects a modest margin compression in the core product lines, partly due to higher raw‑material costs and a shift toward lower‑margin specialty flavors.
Management commentary underscores the company’s focus on health and wellness trends. CEO Julie Smolyansky said Lifeway will “continue to capitalize on the powerful health and wellness consumer trends, including the surge in GLP‑1 medication use and gut health awareness.” She also highlighted ongoing investments in supply‑chain efficiency and product innovation that support the margin expansion seen in Q3.
The market reaction to the proxy filing has been muted, with limited volatility. Investors appear to have already priced in the governance dispute and the stability offered by the Danone cooperation agreement, resulting in a subdued response compared to the strong reaction to the Q3 earnings release earlier in November.
The content on BeyondSPX is for informational purposes only and should not be construed as financial or investment advice. We are not financial advisors. Consult with a qualified professional before making any investment decisions. Any actions you take based on information from this site are solely at your own risk.