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MC

Mama's Creations, Inc. (MAMA)·Q1 2026 Earnings Summary

Executive Summary

  • Strong Q1 FY26 print: revenue $35.255M (+18.2% YoY), gross margin 26.1%, diluted EPS $0.03; cash from operations $6.005M drove cash to $12.011M and reduced total debt to $4.6M .
  • Estimates: revenue beat consensus $32.739M by ~7.7% and EPS beat $0.023 by ~29%; 3 EPS and 4 revenue estimates contributed to consensus (S&P Global)*.
  • Pricing actions fully implemented by May to defend margins; record trade promotion investment at 6% of gross revenue (vs 2% in Q4) delivered high ROI with Publix-branded “Pub Sub” and Costco national digital MVM .
  • Operations: chicken commodity headwinds (≈+50% YoY) offset by fixed-price protein contracts (>50% of FY26 needs), throughput gains, yield improvements via tumbling/trimming, and overtime down ~70% .
  • Catalysts: margin stability at high-20s%, expanding club and mass retail distribution (Costco/BJ’s/Walmart/Lidl/Amazon Fresh/Sheetz), WMS/S&OP rollouts, and disciplined M&A optionality supported by improved cash and leverage .

What Went Well and What Went Wrong

What Went Well

  • Revenue growth outpaced category growth (~5x) and was >90% volume-driven; gross margin at 26.1% despite record trade spend, with pricing actions in place by May .
  • Operational efficiency gains: overtime down ~70%, tumbling increased yields by ~10%, in-house trimming 35% ahead of plan; fixed-price protein contracts secured for >50% of FY26 needs .
  • Cash generation and deleveraging: CFO reported $6.0M cash from operations; cash rose to $12.0M, total debt cut to $4.6M .

Management quote: “Our enhanced and reimagined chicken operation drove meaningful efficiency increases, with overtime down by nearly 70% and significant yield increases… performing ahead of plan” .

What Went Wrong

  • Continued chicken commodity inflation pressured margins, necessitating heavier trade investment (6% of gross revenue) to drive velocities and brand equity .
  • Marketing spend increased 71% YoY (historical underinvestment being addressed), tempering operating leverage in the near term .
  • No formal numeric revenue/EPS guidance; margin commentary implies high-20s% target, but macro commodities remain volatile and hedges cover only “more than half” of protein needs .

Financial Results

Summary vs prior quarters and YoY

MetricQ3 FY25 (Oct 31, 2024)Q4 FY25 (Jan 31, 2025)Q1 FY26 (Apr 30, 2025)
Revenue ($USD Millions)$31.523 $33.585 $35.255
Gross Margin (%)22.6% 27.0% 26.1%
Operating Expenses (% of Sales)20.8% 21.3% 21.6%
Net Income ($USD Millions)$0.410 $1.600 $1.237
Net Income Margin (%)1.3% 4.8% 3.5%
Diluted EPS ($)$0.01 $0.04 $0.03
Adjusted EBITDA ($USD Millions, non-GAAP)$1.740 $3.088 $2.843

Actual vs Wall Street Consensus (Q1 FY26)

MetricActualConsensusSurprise% Surprise
Revenue ($USD)$35,255,000 $32,739,250*Beat+7.7%*
Primary EPS ($)$0.03 $0.02333*Beat+28.6%*
Estimate Count (EPS)—3*——
Estimate Count (Revenue)—4*——

Values marked with * retrieved from S&P Global.

KPIs and Balance Sheet

KPIQ3 FY25Q4 FY25Q1 FY26
Cash & Equivalents ($USD Millions)$9.319 $7.150 $12.011
Cash from Operations ($USD Millions)——$6.005
Total Debt ($USD Millions)$6.3 $5.1 $4.6
Trade Promotion (% of Gross Revenue)—~2% (Q4 ref) 6%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Gross Margin ProfileNear-term FY26High-20s% target (Q4 commentary) “Continue to hover in high 20% range” Maintained
Trade Promotion IntensityMulti-quarter FY26Low single-digit % of revenue (historical) Moving toward ~10% of revenue over time; stepped up from 2% to 6% in Q1 Raised (investment)
Pricing ActionsFY26 start (May)Negotiated in Q1 Fully implemented by beginning of May Implemented
Protein Cost ManagementFY26Fixed-price contracts for >50% of anticipated protein volume Reiterated; supports margin stability Maintained

No formal quantitative guidance for revenue, EPS, OpEx, OI&E, tax rate, or dividends was provided in Q1 FY26 materials .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 FY25)Previous Mentions (Q4 FY25)Current Period (Q1 FY26)Trend
Margin trajectoryConstruction headwinds depressed margins by ~400 bps; November step-change recovery indicated Gross margin 27.0% in Q4, highest of year; near-term target high-20s% Gross margin 26.1% with heavy trade; normalized profile high-20s% reiterated Stabilizing in high-20s%
Chicken commodity inflationPressured Q3 margins Anticipated macro/tariff pressure; fixed-price contracts Chicken ~+50% YoY; mitigated via contracts, trimming, tumbling yields Headwind mitigated by operations/hedges
Trade promotion strategySuccessful promotions to drive velocities High ROI promotions; broader customer door expansion Record 6% of gross revenue; Publix-branded “Pub Sub,” Costco national digital MVM Aggressive, ROI-focused brand-building
Tech/process upgrades (WMS/S&OP)Automation and staffing model improvements underway Completed CapEx to double grilled chicken throughput WMS live at Farmingdale; WMS replication and S&OP rollouts in Q2 Ongoing digital/operational enablement
Channel/customer expansionClub/mass ramp; leadership hires (CCO/COO) New launches: Walmart, all Albertsons regions, all 8 Costco regions, Kroger HomeChef, Lidl, BJ’s, Sheetz, Amazon Fresh Additional commitments: Costco rotation; Publix Meals for One; Walmart digital ROAS double-digit; Lidl/Amazon Fresh/Sheetz scaling Broadening national footprint
M&A postureBuilding capabilities; team expansion Positioned to identify/acquire/integrate targets Refined criteria; focus on deli manufacturers; active pipeline; prioritizing acquisitions over large CapEx in FY26 Increasingly active, disciplined

Management Commentary

  • “Revenue growth outpaced category growth by ~5x… we invested a record 6% of gross revenue into trade promotion… on a normalized basis, our product-level margins continue to meet or exceed our expectations” .
  • “Pricing increases across our customer portfolio… fully implemented by May… overtime down by nearly 70%… yield increases due to upstream tumbling and trimming” .
  • “Secured fixed-price contracts covering more than half of our anticipated protein volume needs for fiscal 2026” .
  • “Our Instacart promotions delivered over a $6 ROAS… Walmart digital campaigns… achieved an outstanding double-digit ROAS” .
  • “Cash flow from operations in the quarter… paying down our total debt to $4.6 million… $12 million of cash… will provide us with ample flexibility to support prospective acquisitions” .

Q&A Highlights

  • Growth outlook: Management comfortable with double-digit revenue growth, emphasizing profitable growth and value-oriented offerings amid consumer trade-down trends .
  • Gross margin sensitivity: Chicken up ~50% YoY; underlying “gross net” margin would be ~32% absent trade (26% + 6% trade), with intent to reinvest excess into brand-building; aim to keep normalized high-20s% GM .
  • Chicken trimming & CapEx: In-house trimming can reach 100% in-year; near-term CapEx modest (e.g., $100k stuffing machine) with preference to allocate capital to M&A in FY26 .
  • Costco/Club dynamics: National digital MVM executed; continued rotations planned; strong BJ’s/Sam’s momentum, plus non-protein SKUs to reduce commodity exposure .
  • Customer diversification: Walmart expansion (FourCount doors, strong digital ROAS), active engagements with Kroger/Target, and wins at Lidl/Amazon Fresh/Sheetz .

Estimates Context

  • Q1 FY26 results were above S&P Global consensus: revenue $35.255M vs $32.739M* and EPS $0.03 vs $0.02333*; 4 revenue estimates and 3 EPS estimates contributed (S&P Global)*.
  • Implications: Expect estimate revisions higher for FY26 revenue and near-term EPS given beat, pricing implementation, and margin stability commentary; monitor gross margin trajectory relative to trade spend ramp toward ~10% of revenue .

Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

  • Underlying margin power intact: Q1 showed 26.1% GM despite 6% trade spend; normalized profile targeted in high-20s% with operational offsets to commodity inflation .
  • Beat-driven estimate momentum: Revenue and EPS beats vs consensus support upward revisions and multiple support, particularly if margin stability persists (S&P Global)* .
  • Distribution and brand-build flywheel: High-ROI trade (Publix/Costco) plus Walmart digital performance should drive velocities and household penetration; expect continued club/mass gains .
  • Balance sheet optionality: $12.0M cash and reduced debt ($4.6M) provide capacity for tuck-in acquisitions; management prioritizing M&A over large CapEx in FY26 .
  • Risk management: >50% of protein volume hedged and process improvements (trimming/tumbling/WMS/S&OP) mitigate commodity volatility; monitor chicken prices and trade elasticity .
  • Near-term trading: Positive setup from beats, pricing implementation, and Costco rotation visibility; watch subsequent quarters for GM progression vs trade ramp and marketing ROI .
  • Medium-term thesis: National deli-prepared platform scaling with operational discipline and potential M&A catalysts; channel diversification reduces single-customer risk while expanding TAM .