Mama's Creations, Inc. Q4 FY2025 earnings call

• Fourth quarter had a robust 27% gross margin, a 440 basis point sequential improvement, enabled by strategic CapEx investments in Farmingdale facility doubling chicken capacity.
• World-class leadership team finalized; focus on 4 C's: cost, controls, culture, catapults.
• Cost improvements achieved through intentional freight management, smarter procurement, labor planning (reducing overtime), reinvesting gains into business.
• Controls transformed with NetSuite ERP rollout enhancing pricing, margin, inventory visibility; warehouse management system implemented.
• Culture bolstered by building world-class senior leadership team, including new CCO and COO, with new hires making impact on business.
• Product expansion with new chicken-based products like cheese-stuffed chicken meatballs, premium chicken strips, etc., leveraging entire chicken breast to drive gross margins.

In the fourth quarter of fiscal 2025, revenue increased 25.7% to $33.6 million compared to $26.7 million in the same year-ago quarter. For fiscal year 2025, revenue was $123.3 million, up 19.4% from $103.3 million the prior year. Gross profit in Q4 2025 was $9.1 million (27% of total revenues), compared to $7.8 million (29.3%) in the year-ago quarter. For fiscal 2025, gross profit was $30.5 million (24.8% of total revenues), versus $30.3 million (29.4%) in the prior year.

• Expect normalized gross margin to hover in the high twenty percent range. Long-term goal is to target margins in the low thirty percent range.
• Target double-digit revenue growth consistently.
• EBITDA in double digits with long-term goal in the teens percentage range, barring extreme commodity fluctuations.

• Commodity price fluctuations which could impact margins.
• Loss of key management personnel.
• Availability of capital.
• Any major litigation regarding the company.

Q: George Kelly asked about breaking down Q4 growth by pricing and volume, and future pricing plans.

A: Adam stated ~90% of revenue growth was volume-driven, pricing reviewed daily, with plans to take additional pricing collaboratively with customers.

Q: George Kelly also asked about guidance for fiscal 2026.

A: Adam mentioned continuing to gain share, expecting double-digit revenue growth consistently, with EBITDA in double digits barring extreme commodity issues.

Q: Eric Des Lauriers asked about chicken breast pricing trends.

A: Adam discussed factors like competition, fast food demand, avian flu impact, and the company's contracts locking in pricing for over half volume to blunt price increases.

Q: Eric Des Lauriers asked about protein contracts.

A: Adam explained the year-long contract with spread-out weekly loads for smooth gross margin profile.

Q: Eric Des Lauriers asked about in-house chicken trimming.

A: Adam noted operational readiness and new products utilizing trimmings performing well, with expansion plans.

Q: Nicholas Sherwood asked about Walmart rollout.

A: Adam said Walmart rollout is going well with top sales, increasing SKUs slowly and steadily.

Q: Nicholas Sherwood asked about trade promotions.

A: Adam stated trade promotion was down due to focusing on margin, planning to ramp up as gross margin improves.

Q: Nicholas Sherwood asked about tariffs impacting sourcing.

A: Adam said procurement is proactive, most supplies are domestic, and equipment maintenance is planned to mitigate tariff concerns