Mama’s Creations(US:MAMA)2025-09-08 21:30Financial Data and Key Metrics Changes - Revenue for Q2 fiscal 2026 increased by 24% to $35.2 million compared to $28.4 million in the same quarter last year, driven by volume gains and new customer door expansion [22][24] - Gross profit rose by 28% to $8.8 million, representing 25% of total revenues, up from 24% in the same year-ago quarter, attributed to operational efficiency improvements [22][24] - Net income increased by 11% to $1.3 million, or $0.03 per diluted share, compared to $1.1 million in the same year-ago quarter [25][26] - Adjusted EBITDA grew by 18% to $3.3 million for Q2 fiscal 2026, compared to $2.7 million in the same year-ago quarter [26] Business Line Data and Key Metrics Changes - The acquisition of Crown One Enterprises is expected to add approximately $56 million in revenue, enhancing cross-selling opportunities and expanding the customer base [8][19] - The company achieved significant growth in the deli-prepared foods segment, with a focus on high-quality, value-oriented offerings [5][10] - The operational efficiency improvements have led to increased throughput and reduced costs, particularly in freight management [12][13] Market Data and Key Metrics Changes - Private label brands have outpaced national brands by 4x, with refrigerated products showing the highest sales growth at 13% [10][11] - The Consumer Price Index indicated a significant variance between away-from-home inflation (3.9%) and at-home inflation (2.2%), creating market potential for deli-prepared foods [12] Company Strategy and Development Direction - The company is focused on integrating Crown One Enterprises efficiently while enhancing its margin profile and driving aggressive synergy realization [21][27] - The strategy includes leveraging operational efficiencies and expanding SKU penetration across Crown One's customer base [9][10] - The company remains open to future M&A opportunities that enhance category leadership and operational scale [20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate commodity headwinds, particularly with chicken prices decreasing significantly [30][32] - The company is well-positioned for profitable growth and market share gains throughout fiscal 2026 and beyond, supported by a robust balance sheet and operational infrastructure [21][24] Other Important Information - The company has implemented a new warehouse management system to improve inventory visibility and reduce waste [14] - A mentorship program has been launched to develop leadership skills among high-potential associates [16] Q&A Session Summary Question: Can you provide insights on gross margins and the impact of chicken commodity prices? - Management indicated confidence in gross margin recovery, noting a significant decrease in chicken prices, which is expected to positively impact margins [30][32] Question: What is the revenue outlook for the Crown acquisition? - Management expects the Crown business to grow and will evaluate SKU rationalization to optimize revenue [33][36] Question: Can you discuss the importance of the Costco partnership? - The partnership with Costco is seen as a significant step towards achieving everyday product status, which could greatly enhance sales [41][44] Question: How does Crown's MAP capabilities compare to Mama's? - Crown brings more experience and equipment, which will enhance operational efficiencies and learning opportunities for Mama's [45][46] Question: What are the trade promotion plans moving forward? - Trade promotion strategies will be adjusted based on gross margin performance, with flexibility to increase or decrease spending as needed [50][53]