Mama’s Creations, Inc. ((MAMA)) has held its Q2 earnings call. Read on for the main highlights of the call.
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Mama’s Creations, Inc. recently held its earnings call, which reflected a generally positive sentiment. The company reported strong performance with significant revenue growth and successful strategic advancements. Despite facing challenges such as increased operating expenses and commodity price pressures, the overall sentiment was buoyed by the company’s achievements and forward momentum.
Strong Revenue Growth
Mama’s Creations experienced a robust 24% increase in revenue for the second quarter of fiscal ’26, reaching $35.2 million compared to $28.4 million in the same quarter last year. This growth was attributed to volume gains and new customer expansions, showcasing the company’s ability to capture market opportunities effectively.
Successful Acquisition
In a strategic move, Mama’s Creations acquired Crown I Enterprises from Sysco Corporation for $17.5 million in an all-cash transaction. This acquisition is expected to bring significant synergies and additional capacity, enhancing the company’s production capabilities and customer access.
Operational Efficiencies
The company reported a reduction in freight costs by 60 basis points from the previous year and quarter, thanks to improved management and planning. These operational efficiencies are expected to contribute positively to the company’s bottom line.
Positive Margin Outlook
Gross profit for the quarter increased by 28% to $8.8 million, representing 25% of total revenues, compared to $6.9 million or 24% in the same quarter last year. This improvement in gross margin highlights the company’s effective cost management strategies.
Decrease in Debt
Mama’s Creations successfully reduced its total debt to $2.7 million as of July 31, 2025, down from $6.8 million a year earlier. This significant decrease in debt strengthens the company’s financial position.
Costco National MVM
The company secured its first-ever national multi-vendor mailer (MVM) with Costco in Q4, significantly expanding its market reach and visibility.
Commodity Headwinds
Despite the strong performance, Mama’s Creations faced continued challenges from protein commodity headwinds, which impacted gross margins. The company is actively working to mitigate these pressures.
Increased Operating Expenses
Operating expenses rose to $7.1 million in the second quarter of fiscal ’26 from $5.3 million in the same quarter last year, reflecting higher marketing investments aimed at supporting growth initiatives.
Lower Net Income Margin
The net income margin slightly decreased to 3.6% of revenue in the second quarter, compared to 4% in the same quarter last year. This was primarily due to increased operating expenses and commodity pressures.
Forward-Looking Guidance
Looking ahead, Mama’s Creations is focused on achieving its $1 billion revenue goal, supported by the recent acquisition of Crown I Enterprises. The acquisition is anticipated to be accretive within the fiscal year and is backed by a $27.4 million credit facility. The company plans to integrate Crown I’s operations to achieve further margin improvements and expand market share.
In summary, Mama’s Creations’ earnings call highlighted a strong performance with significant revenue growth and strategic advancements. While challenges such as increased operating expenses and commodity pressures were noted, the company’s strategic focus and operational efficiencies position it well for future growth. Investors and stakeholders can remain optimistic about the company’s trajectory and its ability to achieve its ambitious goals.