Mama’s Creations (NASDAQ:MAMA) reported fiscal second-quarter revenue growth of 55% and said expanded retail distribution, contributions from the Bay Shore acquisition and new product launches helped drive operating leverage and higher profitability.
For the quarter, revenue increased to $54.6 million from $35.2 million a year earlier. Net income more than doubled to $2.6 million, or $0.06 per diluted share, from $1.3 million, or $0.03 per diluted share. Adjusted EBITDA, a non-GAAP measure, rose 68.9% to $5.5 million, while adjusted EBITDA margin expanded to 10.1% from 9.3% in the prior-year quarter.
Margins Improve Sequentially as Launches Mature
Gross profit rose 49.1% to $13.1 million. Gross margin was 24.0%, compared with 24.9% in the year-ago period but up from 23.6% in the fiscal first quarter. Chief Financial Officer Anthony Gruber said the sequential improvement reflected new packaging technologies and protein form factors moving toward steady-state production following first-quarter launches.
Management said it continues to target corporate gross margins in the mid- to high-20% range. O’Michaels said progress toward that goal will depend in part on increasing sales of chicken “bottom” products, which allow the company to use more of its chicken inputs and reduce trimming costs, as well as further improvement at the Bay Shore facility.
Operating expenses rose in dollars to $10.1 million from $7.1 million, largely due to the Bay Shore acquisition, but declined as a percentage of revenue. Operating expenses represented 18.5% of revenue, down 160 basis points from 20.1% a year earlier.
During the question-and-answer session, O’Michaels said the company intentionally shifted about $500,000 of marketing spending into trade promotions during the quarter because it was seeing stronger returns. He said Mama’s spent more than $1 million more on trade activity than it did in the prior-year period.
Retail Distribution Expands With Kroger, Costco and Sam’s Club
Mama’s announced its first launch with Kroger, beginning next month in the retailer’s Louisville division. The initial rollout will cover more than 100 stores and include four products, including three chicken-bottom stock-keeping units. O’Michaels said the company plans to begin in one division and expand over time if product performance supports additional distribution.
The company also said it was approved for Costco’s second-half multi-vendor mailer promotion across all eight U.S. regions. O’Michaels said the promotion is forecast to be larger than the prior-year program and is expected to run around the last two weeks of December or early January, although Costco rotations had already begun in several regions.
At Sam’s Club, Mama’s recently launched a breaded panko chicken breast product in 300 clubs, O’Michaels said. The company also cited new launches or placements at Albertsons, BJ’s and more than a dozen other customers. More than 60% of new placements launched during the second quarter used chicken-bottom products, according to management.
Walmart remained a key growth driver. O’Michaels said Mama’s products are now in more than 2,300 Walmart stores, above the approximately 2,000 stores initially discussed for the rollout. He said grilled chicken products were performing particularly well, while sausage and peppers and meatloaf were showing lower velocities than beef meatballs and cheese-stuffed chicken meatballs. The company said it is reviewing the assortment proactively and may replace slower-moving products with higher-velocity items.
Bay Shore Capacity, Procurement and Automation Efforts
Management said the Bay Shore facility was instrumental in supporting recent Walmart and Sam’s Club launches. O’Michaels said the site is improving toward gross-margin levels achieved at Mama’s East Rutherford and Farmingdale operations as volume increases and fixed costs are absorbed over more production.
The company said it still has available capacity at Bay Shore, which is not operating seven days a week or around the clock in all areas. O’Michaels said Mama’s could “pretty much double” its business from the prior year using its existing facilities, though he emphasized that product mix and automation will affect capacity utilization.
Mama’s also completed an expansion at its East Rutherford, New Jersey, site that nearly doubled frozen and refrigerated storage capacity. The company expects the expansion to lower outside storage costs and improve logistics flexibility. It has added two Proseal machines to increase production efficiency, according to O’Michaels.
On procurement, management said supplier diversification avoided a potential 12% materials increase for packaging. The company also added three beef suppliers and said changes to supply planning are supporting additional safety-stock levels for its top products.
Cash Position Supports Acquisition Strategy
Cash and cash equivalents totaled $138.6 million as of July 31, up from $20 million at the end of fiscal 2026. Gruber said the increase was primarily driven by $108.6 million of net proceeds from a July common-stock offering and $11.9 million of operating cash flow generated during the first six months of the fiscal year. Total debt stood at $4.8 million.
O’Michaels said the larger cash balance and low debt give Mama’s greater flexibility to pursue acquisitions that add capacity, capabilities or customer access. He said the company is less interested in acquisitions of approximately $25 million in revenue than it may have been previously, given the work required to integrate a business, but stressed that management will remain disciplined on valuation and strategic fit.
The company also said it sees seafood as a potential longer-term opportunity, either through internal capabilities or acquisitions, though O’Michaels said Mama’s has substantial room to expand its existing beef, chicken and vegetable offerings.
About Mama’s Creations (NASDAQ:MAMA)
Mama’s Creations, Inc engages in the marketing, manufacturing, and distribution of beef meatballs with sauce, turkey meatballs with sauce, beef meat loaf, sausage and peppers, chicken parmesan, and other similar meats and sauces. Its products include beef meatballs, turkey meatballs, stuffed meatballs, lasagna roll ups, retail ready meals, bulk deli, single-size pasta bowls, and packaged refrigerated products. Its brands include MamaMancini’s, Creative Salads, and The Olive Branch. The company was founded by Daniel Dougherty on July 22, 2009 and is headquartered in East Rutherford, NJ.
