Mama’s Creations(US:MAMA)2025-12-08 22:32Financial Data and Key Metrics Changes - Revenue for Q3 fiscal 2026 increased by 50% to $47.3 million compared to $31.5 million in the same quarter last year, driven by the acquisition of Crown One and robust growth in the legacy business [21][22]. - Gross profit rose by 56.6% to $11.1 million, representing 23.6% of total revenues, up from 22.6% in the prior year [21][22]. - Net income increased by 31.7% to $0.5 million, or $0.01 per diluted share, compared to $0.4 million in the same year-ago quarter [24]. - Adjusted EBITDA surged by 118% to $3.8 million for Q3 fiscal 2026, compared to $1.7 million in the same year-ago quarter [24]. Business Line Data and Key Metrics Changes - The acquisition of the Bayshore facility is expected to enhance production capabilities and operational efficiency, contributing to the overall growth strategy [6][9]. - The company has successfully centralized 100% of Bayshore's procurement, leading to significant cost reductions in beef and improved gross margins [9][11]. Market Data and Key Metrics Changes - The grocery deli segment is becoming increasingly competitive, with a noted shift of consumers opting for deli-prepared foods over restaurant meals, which has more than doubled since 2017 [10]. - The overall retail food service segment has grown to over $52 billion, indicating a favorable market environment for the company's offerings [10]. Company Strategy and Development Direction - The company aims to elevate Bayshore's margin profile and integrate workflows across its facilities to unlock synergy opportunities [28]. - The focus remains on executing the Bayshore integration while exploring additional acquisition opportunities that align with the company's strategic framework [20]. Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's operational model and consumer demand for deli-prepared foods, highlighting a strong pipeline with tier-one retailers [29]. - The company is optimistic about its growth trajectory, supported by recent acquisitions and strategic partnerships [20][29]. Other Important Information - The company has been recognized by Forbes and TIME as one of the most successful small-cap companies and growth leaders in 2026, respectively [29]. - The transition to a make-to-stock organization is expected to improve service levels and operational efficiency [66]. Q&A Session Summary Question: Progress on AIC front - Management highlighted ongoing efforts to drive AIC (Average Item Count) with new items being introduced at existing customers, emphasizing the importance of increasing velocities [32][33]. Question: Sell-through and visibility initiatives for Costco - Management confirmed that products are already shipping and discussed various marketing initiatives to enhance visibility and awareness, including partnerships with Instacart and Walmart [36][39]. Question: Locking in chicken prices for 2026 - Management indicated that the acquisition has significantly increased chicken needs, allowing for better pricing negotiations and improved visibility in the supply chain [40][42]. Question: SKU rationalization of Crown products - Management confirmed that SKU rationalization is underway, focusing on gross margin optimization and customer relationships before making decisions [50][53]. Question: Trade promotion levels and Crown integration impact - Management noted that Crown's products have low trade rates, which may lower overall trade promotion levels, but emphasized the importance of high ROI in trade spending [55][56].