Mama's Creations, Inc. Q1 FY2026 earnings call

Key Points:

• Revenue reached a record $35.3 million, up 18% year over year, driven mostly by volume.
• Gross margins returned to the near-term target range at 26.1%, with a record 6% of gross revenue invested in trade promotion.
• Secured fixed price contracts covering over half of anticipated volume protein needs for fiscal 2026, providing margin stability.
• Benefiting from consumer shift towards deli prepared foods due to restaurant price fatigue and trade-down trends.
• Executing the four C's strategy:
  • Cost: Efficiency gains in chicken operations, labor efficiency improvement (overtime hours down nearly 70%), and in-house trimming/outperforming targets.
  • Controls: Warehouse management system implemented at Farmingdale, with rollout to East Rutherford in Q2; sales and operations planning (S&OP) to enhance production efficiency.
  • Culture: Appointed new procurement/planning head, launched career pathing initiative for employees.
  • Catapult: Secured new distribution wins with major retailers like Albertsons, BJ's, Costco, Publix, Lidl, Amazon Fresh, and Sheetz.
• Intensified trade promotion, increasing spend to 6% of gross revenues, with successful ROI at Publix and Costco.

Revenue for the first quarter of fiscal 2026 increased 18% to $35.3 million compared to $29.8 million in the same period last year. Gross profit grew 23.1% to $9.2 million, or 26.1% of total revenues. The growth was driven by volume gains from same customer cross-selling, existing item velocity, and new customer acquisitions, partially offset by increased trade promotion investments. Volume contributed over 90% to the revenue growth.

Forward-Looking Statements:

• Aim to maintain normalized gross margin in the high 20% range despite macro fluctuations.
• Target to rightsize trade promotion investments from 6% of revenue closer to 10%.
• Confident in double-digit growth for the rest of the year, focusing on profitable growth through new product development and retailer demand.
• Actively evaluating M&A opportunities with refined criteria to enhance category leadership and scale operations.

Risks Discussed:

• Macroeconomic volatility and ongoing commodity price fluctuations.
• Potential loss of key management personnel.
• Exposure to major litigation that could materially impact results.

Q: How should we think about growth rates for the rest of the year?

A: Adam is confident in double-digit growth, emphasizing profitable growth driven by new product development and strong retailer demand despite consumer and macroeconomic uncertainties.

Q: Confidence in gross margins moving forward?

A: The team has mitigated macro headwinds through efficiencies, hedging, and strategic trade investments, expecting gross margin improvement as chicken prices stabilize.

Q: Progress on in-house chicken trimming?

A: Trimming is ahead of plan, with operational capacity to trim more, fueled by new product sales into major retailers like BJ's, Albertsons, and Costco.

Q: Details on refined M&A criteria?

A: Focus on acquiring deli companies with own manufacturing, geographically flexible, and aligning with core strategy of category leadership and scale.

Q: Costco promotions and future opportunity?

A: In discussions for more promotions with Costco,看好 club channel growth with strong partnerships and potential for additional MVMs and item expansions.

Q: Rollout progress in Walmart, Kroger, Target?

A: Making progress with Walmart (expanding items and digital partnerships), and actively working with Kroger and Target, with new products like paninis and sweet potatoes gaining traction