Mama's Creations Q3 Earnings Lag Estimates, Sales Grow 10% Y/Y

Core Insights - Mama's Creations, Inc. reported third-quarter fiscal 2025 results with revenue growth but a decline in earnings per share [1][4] Financial Performance - Total revenues increased by 10% year over year to $31.5 million, surpassing the Zacks Consensus Estimate of $30.4 million, driven by effective pricing strategies and volume gains [5] - Quarterly earnings were reported at 1 cent per share, missing the Zacks Consensus Estimate of 4 cents and down 80% from 5 cents in the prior-year period [4] - Gross profit decreased by 17.6% to $7.1 million, with gross margin contracting by 750 basis points to 22.6% compared to 30.1% in the same quarter last year, primarily due to rising commodity costs and construction-related impacts [6] Operational Efficiency - The company completed significant capital expenditures aimed at doubling grilled chicken throughput and enhancing operational efficiency, despite facing temporary construction challenges [2] - Operating expenses rose by 10.5% year over year to $6.6 million, with operating expenses as a percentage of sales remaining relatively flat at 20.8% [8] Cash Flow and Debt Management - As of the end of the fiscal third quarter, the company had cash and cash equivalents of $9.3 million and total shareholders' equity of $23 million, with total debt at $6.3 million [10] - The company has paid down $2.5 million of debt year to date, and net cash flow from operations for the nine months ended October 31, 2024, was $6 million [10]