Mama's Creations, Inc. MAMA reported third-quarter fiscal 2025 results, wherein the top line beat the Zacks Consensus Estimate and showed year-over-year growth, while the bottom missed the same and declined year over year. 

Mama’s Creations delivered strong revenue growth in the fiscal third quarter while completing significant capital expenditures to double grilled chicken throughput and enhance operational efficiency. Despite temporary construction-related challenges at its Farmingdale facility, the company has emerged stronger with November’s preliminary unaudited gross margins showing a sharp rebound and signaling the resolution of prior headwinds.

This Zacks Rank #3 (Hold) stock has risen 27.6% in the past three months against the industry’s decline of 6.7%.

MAMA’s Quarterly Performance: Key Metrics and Insights

Mama’s Creations, a leading national marketer and manufacturer of fresh deli-prepared foods, posted quarterly earnings of 1 cent per share, which missed the Zacks Consensus Estimate of 4 cents and decreased 80% from 5 cents reported in the prior-year period.

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Total revenues of the company rose 10% year over year to $31.5 million and beat the Zacks Consensus Estimate of $30.4 million. This growth was driven by successful pricing strategies and volume gains, which resulted from increased demand, effective trade promotions, cross-selling new products to existing customers and expanding into new customer channels.

Gross profit decreased 17.6% to $7.1 million from $8.6 million in the year-ago quarter. The gross margin contracted 750 basis points (bps) to 22.6% compared with 30.1% in the third quarter of fiscal 2024. This decline was caused by significant increases in commodity costs relative to historical averages. Moreover, a non-recurring impact from construction related to the now-completed strategic CapEx projects at the Farmingdale facility hurt gross margins by an estimated 400 bps, according to management.

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Operating expenses of $6.6 million increased 10.5% year over year. Operating expenses as a percentage of sales were relatively flat, rising only 10 bps to 20.8% in the third quarter of fiscal 2025. The 90-bps improvement in freight efficiency, offset a 75% year-over-year increase in marketing expenses.

Adjusted EBITDA totaled $1.7 million in the third quarter of fiscal 2025. The figure was down from $3.5 million in the prior-year quarter, indicating a decline of 49.6%.

MAMA’s Financial Snapshot

Mama’s Creations ended the fiscal third quarter with cash and cash equivalents of $9.3 million and total shareholders’ equity of $23 million. As of Oct. 31, 2024, total debt was $6.3 million. The company has paid down $2.5 million of debt year to date. During the nine months ended Oct. 31, 2024, the net cash flow provided by operations was $6 million.

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