MamaMancini`s Holdings Inc Stock price
Compare with Peer Group
📊 Peer Group
📈 What is it?
The peer group consists of the companies with the most similar business model. They serve as a benchmark for putting a stock into context.
🧮 How is it selected?
Based on similarity of business model, meaning companies from the same industry with comparable products and a similar customer base. That's the only way to compare apples to apples.
🏛️ Why does it matter?
Whether a stock is cheap or expensive is best judged by comparison. A P/E of 18 or an EV/FCF of 20 can look cheap or expensive depending on the yardstick. The peer group gives you the most accurate one: companies with a similar business model that operate under the same conditions.
🎯 What does it mean for investors?
When a metric sits below the peer average, the stock is valued more cheaply relative to its competitors, and above the average more expensively. A discount to the peer group can be an opportunity, but it can also have a reason (for example lower growth). The comparison is a starting point, not a verdict.
Is MamaMancini`s Holdings Inc a Top Scorer Stock based on the Dividend, High-Growth-Investing or Leverman Strategy?
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Key metrics
📘 Market Capitalization
📈 What is it?
Market capitalization shows how much a company is currently worth on the stock market.
🧮 How is it calculated?
🏛️ Why is it important?
It helps classify companies by size (Large, Mid, Small Cap) and indicates their market presence and relative stability.
🧮 Calculation
🎯 What does this mean for investors?
- Large-cap companies tend to be more stable, often pay dividends, but may grow more slowly.
- Smaller firms may offer higher growth potential but come with more volatility.
- Market capitalization is a useful indicator of company size — but not a measure of whether a stock is undervalued or overvalued.
📘 Enterprise Value (EV)
📈 What is it?
Enterprise Value represents the total cost to acquire a company — including its debt and excluding its cash reserves.
🧮 How is it calculated?
(= Market Cap + Net Debt)
🏛️ Why is it important?
EV gives a more complete picture of a company's value than market cap alone and is used in key valuation ratios like EV/FCF or EV/Sales.
🧮 Calculation
🎯 What does this mean for investors?
- Enterprise Value shows the true cost of buying a company, including all financial obligations.
- It is more accurate than just looking at market cap, especially when comparing companies with different levels of debt or cash.
- Professional investors prefer EV-based multiples because they better reflect the company’s full financial footprint.
📘 Net Debt
📈 What is it?
Net Debt shows how much debt remains after subtracting a company’s available cash reserves.
🧮 How is it calculated?
🏛️ Why is it important?
It indicates how dependent a company is on borrowed money and how easily it can service its debt in the short term.
🧮 Calculation
🎯 What does this mean for investors?
- Low or negative net debt signals financial strength and flexibility.
- Companies with strong cash positions are better positioned in crises.
- High net debt increases financial risk — especially in environments with rising interest rates or economic downturns.
📘 Cash
📈 What is it?
Cash represents all liquid assets a company can access immediately — including cash, bank deposits, and short-term investments.
🧮 How is it calculated?
🏛️ Why is it important?
It reflects a company’s financial flexibility and resilience — enabling investments, buybacks, or buffer in downturns.
🧮 Calculation
🎯 What does this mean for investors?
- A strong cash position means greater room for maneuver and crisis resistance.
- Cash-rich companies can invest, pay down debt, or repurchase shares.
- But excess idle cash might indicate a lack of growth opportunities.
📘 Shares Outstanding
📈 What is it?
Shares outstanding represent the total number of a company’s shares currently held by investors — excluding treasury stock.
🧮 How is it calculated?
🏛️ Why is it important?
It’s the basis for key metrics like Earnings Per Share (EPS), Market Capitalization, or the Price/Earnings ratio (P/E).
🧮 Calculation
🎯 What does this mean for investors?
- Fewer shares in circulation typically increase earnings per share — making each share more valuable.
- Share buybacks reduce the number of shares and boost per-share metrics.
- Issuing new shares does the opposite — diluting shareholder value and lowering per-share figures.
📘 Price-to-Earnings Ratio (P/E)
📈 What is it?
The P/E ratio shows how many times a company's earnings per share are reflected in its current share price — in other words, how "expensive" the stock appears relative to its profits.
🧮 How is it calculated?
🏛️ Why is it important?
The P/E ratio is one of the most widely used valuation metrics. It helps investors assess whether a stock appears cheap or expensive compared to its earnings power.
🧮 Calculation
📊 P/E (TTM) = Based on earnings from the last 12 months (Trailing Twelve Months):🎯 What does this mean for investors?
- A low P/E may indicate undervaluation — or signal underlying issues.
- A high P/E may reflect strong growth expectations — or an overvalued stock.
📘 Price-to-Sales Ratio (P/S)
📈 What is it?
The P/S ratio shows how much investors are paying for $1 of the company’s revenue – regardless of profitability.
🧮 How is it calculated?
🏛️ Why is it important?
P/S is especially useful for evaluating growth companies or businesses not yet profitable. It reflects how the market values the company’s sales.
🧮 Calculation
Market Cap = $671.85m | Revenue (TTM) = $189.23m
Market Cap = $671.85m | Estimated Revenue = $227.70m
🎯 What does this mean for investors?
- A low P/S may indicate undervaluation — or low profitability.
- A high P/S can reflect strong growth expectations — or excessive optimism.
- Especially helpful when evaluating companies where profits are low, volatile, or negative.
📘 Enterprise Value to Sales (EV/Sales)
📈 What is it?
EV/Sales shows how much investors are paying for $1 of revenue — considering not just equity, but also debt and cash. It’s the capital structure–adjusted version of the P/S ratio.
🧮 How is it calculated?
🏛️ Why is it important?
It’s ideal for comparing companies with different levels of debt. It reflects a company's true cost relative to its revenue.
🧮 Calculation
Enterprise Value = $653.65m | Revenue (TTM) = $189.23m
Enterprise Value = $653.65m | Forward Revenue = $227.70m
🎯 What does this mean for investors?
- EV/Sales allows for capital structure–neutral company comparisons.
- A lower ratio may indicate undervaluation; a higher one may signal strong growth expectations or overvaluation.
- Especially helpful when evaluating high-growth companies with low or negative earnings.
📘 Enterprise Value to Free Cash Flow (EV/FCF)
📈 What is it?
EV/FCF shows how many years it would take for a company to "pay back" its enterprise value using its free cash flow.
🧮 How is it calculated?
🏛️ Why is it important?
It focuses on real cash generation, ignoring accounting noise — ideal for assessing profitability and value based on liquidity, not earnings.
🧮 Calculation
🎯 What does this mean for investors?
- A low EV/FCF may signal undervaluation and strong cash generation.
- A high EV/FCF might reflect weak recent cash flow or aggressive growth expectations.
- Best suited for stable, mature businesses with predictable free cash flows.
📘 Price-to-Book Ratio (P/B)
📈 What is it?
The P/B ratio compares a company’s market value to its book value — showing how much investors are paying for each dollar of net assets.
🧮 How is it calculated?
🏛️ Why is it important?
P/B is commonly used for asset-heavy industries like banks or industrials. It helps assess whether a stock is trading above or below its net asset value.
🧮 Calculation
🎯 What does this mean for investors?
- A P/B below 1 may signal undervaluation — or weak profitability.
- A P/B above 1 implies the market expects future value creation (e.g., brand, IP, growth).
- Best used for companies with tangible assets and strong balance sheets.
📘 Equity Ratio
📈 What is it?
The equity ratio indicates what portion of a company’s total assets is financed by shareholders’ equity – in other words, how much it relies on its own capital.
🧮 How is it calculated?
🏛️ Why is it important?
A high equity ratio reflects financial strength and stability, especially during downturns. It’s a key indicator of a company’s solvency and long-term risk profile.
🎯 What does this mean for investors?
- Companies with high equity ratios are generally more resilient and less dependent on external debt.
- Low equity ratios can signal higher risk or aggressive financial strategies.
- Important: Always assess the equity ratio in combination with the return on equity (ROE). This shows not just how stable the company is – but also how efficiently it uses shareholder capital.
📘 Return on Equity (ROE)
📈 What is it?
Return on equity (ROE) shows how efficiently a company uses its shareholders’ equity to generate profit. In other words: how much net income is earned per dollar of equity.
🧮 How is it calculated?
🏛️ Why is it important?
ROE is a core profitability metric. It helps investors understand whether a company delivers attractive returns on the capital provided by its shareholders.
🎯 What does this mean for investors?
- A high ROE indicates that the company is using its capital efficiently and profitably.
- It’s especially meaningful for capital-intensive businesses or firms with high equity bases.
- Important: A very high ROE can also result from high debt levels – always interpret it alongside the equity ratio to assess financial health.
📘 Return on Capital Employed (ROCE)
📈 What is it?
ROCE measures how efficiently a company generates profits from its total capital – including both equity and interest-bearing debt.
🧮 How is it calculated?
It evaluates the return on all capital employed, regardless of how it’s financed.
🏛️ Why is it important?
ROCE is ideal for comparing companies with different financing structures. It shows how well management uses capital to create value for both shareholders and creditors.
🧮 Calculation
🎯 What does this mean for investors?
- A high ROCE means the company uses its capital efficiently – regardless of whether it's funded by debt or equity.
- The higher the ROCE compared to peers, the more value the company creates with its invested capital.
- Especially relevant for capital-intensive sectors like industrials, energy, or infrastructure.
📘 Return on Invested Capital (ROIC)
📈 What is it?
ROIC measures how efficiently a company generates returns from the capital invested in its core operations – regardless of whether the capital comes from equity or debt.
🧮 How is it calculated?
- NOPAT = Net Operating Profit After Taxes
- Invested Capital = Operating assets minus non-interest-bearing liabilities
🏛️ Why is it important?
ROIC is one of the most accurate indicators of capital efficiency. Unlike return on equity, it is not distorted by leverage and shows how much value is created for all capital providers.
🎯 What does this mean for investors?
- A high ROIC shows how effectively a company uses the capital that is truly invested in its core operations.
- Unlike ROCE, ROIC focuses only on the capital that is actively used to run the business – and that requires a return (i.e. interest-bearing).
- Especially useful when comparing companies with large amounts of excess cash or non-interest-bearing liabilities – giving a more realistic picture of capital efficiency.
📘 Leverage Ratio (Debt-to-Equity)
📈 What is it?
The leverage ratio indicates how much a company relies on interest-bearing debt (such as loans and bonds) relative to its shareholders’ equity.
🧮 How is it calculated?
🏛️ Why is it important?
This ratio helps assess a company’s financial structure and risk profile. High leverage can enhance returns – but also increases exposure to interest rate changes and financial stress.
🧮 Calculation
🎯 What does this mean for investors?
- A low leverage ratio signals financial strength and independence.
- A higher ratio can improve returns in good times but increases risk during downturns or rising interest rate periods.
- 👉 Always interpret in the context of industry, capital intensity, and interest rate environment.
📘 Revenue
📈 What is it?
Revenue shows how much a company earns in total from selling its products and services – the gross income before any costs are deducted.
🧮 How is it calculated?
🏛️ Why is it important?
Revenue is one of the key figures to assess a company’s size, market position, and growth potential.
🧮 Calculation
🎯 What does this mean for investors?
- Growing revenue indicates rising demand and can be an early signal of future earnings growth.
- Comparing actual and expected revenue reveals trends in the market environment and analyst sentiment.
- Note: Strong revenue alone isn’t enough – margins and profitability matter just as much.
📘 EBITDA
📈 What is it?
EBITDA stands for “Earnings Before Interest, Taxes, Depreciation, and Amortization.” It reflects a company’s operating profit before the effects of financing, taxes, and accounting depreciation.
🧮 How is it calculated?
🏛️ Why is it important?
EBITDA is widely used to evaluate a company’s operating performance – especially across capital-intensive sectors or international comparisons.
🧮 Calculation
🎯 What does this mean for investors?
- A high or growing EBITDA indicates strong operational profitability – independent of taxes, interest, or accounting methods.
- It’s especially useful for comparing companies across sectors or geographies.
- Important: EBITDA is not a net income figure – it excludes key costs like depreciation and interest.
📘 EBIT
📈 What is it?
EBIT stands for “Earnings Before Interest and Taxes.” It reflects a company’s operating profit after depreciation, but before interest and tax expenses.
🧮 How is it calculated?
🏛️ Why is it important?
EBIT is a core profitability metric that shows how well the company performs in its main business operations – independent of capital structure and tax environment.
🧮 Calculation
🎯 What does this mean for investors?
- A high EBIT indicates strong profitability from the company’s core business – before financial and tax effects.
- It allows better comparison between companies with different debt levels or tax structures.
- Compared to EBITDA, EBIT already accounts for depreciation and reflects capital intensity more clearly.
📘 Net Income
📈 What is it?
Net income is the company’s total profit – the amount left after all expenses, taxes, interest, and depreciation have been deducted.
🧮 How is it calculated?
🏛️ Why is it important?
Net income is the most comprehensive measure of a company’s profitability – showing how much actual profit remains after all business and financing costs.
🧮 Calculation
🎯 What does this mean for investors?
- Growing net income indicates that the company is managing all of its costs efficiently.
- It directly influences valuation metrics like P/E ratio and the company’s dividend capacity.
- Over time, net income trends reveal how resilient and profitable the business model really is.
📘 Free Cash Flow (FCF)
📈 What is it?
Free Cash Flow shows how much actual cash remains after a company covers its operating expenses and capital expenditures.
🧮 How is it calculated?
🏛️ Why is it important?
FCF reflects a company’s real financial strength – regardless of accounting profits. It shows how much flexibility a company has for dividends, share buybacks, or debt reduction.
🧮 Calculation
🎯 What does this mean for investors?
- High free cash flow means the company generates real, usable cash – independent of reported net income.
- It’s often the most reliable base for sustainable dividends and buybacks.
- Declining FCF can be an early warning sign – even when profits appear stable.
📘 Revenue Growth
📈 What is it?
Revenue growth shows how much a company’s sales have changed compared to the previous year – both on a trailing basis (TTM) and based on forward projections.
🧮 How is it calculated?
Forward = (Expected revenue ÷ Revenue in prior year − 1) × 100
Forward growth is based on analyst estimates for the current fiscal year.
🏛️ Why is it important?
Rising revenue signals growing demand, business expansion, and market share gains – especially important for growth-oriented companies.
🧮 Calculation
🎯 What does this mean for investors?
- Growth is the engine of long-term value creation – especially in tech and growth sectors.
- What matters is not just current growth, but its sustainability.
- Forward projections reflect whether analysts expect continued momentum – or a slowdown.
📘 EBITDA Growth
📈 What is it?
EBITDA growth shows how much a company’s operating profit (before interest, taxes, depreciation, and amortization) has increased or decreased compared to the previous year.
🧮 How is it calculated?
Forward = (Expected EBITDA ÷ EBITDA from prior year − 1) × 100
The forward estimate is based on analyst projections for the current fiscal year.
🏛️ Why is it important?
Growing EBITDA indicates improving operational profitability – regardless of financing or accounting effects.
🧮 Calculation
🎯 What does this mean for investors?
- Strong EBITDA growth signals operational efficiency and scalability – especially during growth phases.
- EBITDA growth can be an early indicator of margin and earnings expansion – but should be assessed alongside revenue and EBIT.
📘 EBIT Growth
📈 What is it?
EBIT growth shows how much a company’s operating profit (after depreciation, but before interest and taxes) has increased compared to the previous year.
🧮 How is it calculated?
Forward = (Expected EBIT ÷ EBIT from prior year − 1) × 100
The forward estimate is based on analyst projections for the current fiscal year.
🏛️ Why is it important?
EBIT growth is a direct indicator of a company’s business performance – taking into account capital intensity through depreciation.
🧮 Calculation
🎯 What does this mean for investors?
- Rising EBIT signals improving operating profitability – even after accounting for depreciation.
- It’s especially important for evaluating companies with significant capital expenditures.
- Combined with revenue and EBITDA growth, EBIT growth provides a well-rounded view of operational progress.
📘 Net Income Growth
📈 What is it?
Net income growth shows how much a company’s bottom-line profit has increased or decreased compared to the previous year – both on a trailing basis (TTM) and based on analyst projections.
🧮 How is it calculated?
Forward = (Expected net income ÷ Net income from prior year − 1) × 100
The forward estimate reflects analysts’ expectations for the current fiscal year.
🏛️ Why is it important?
Net income is the ultimate measure of profitability. Growing net income signals stronger efficiency, cost control, and sustainable earnings power.
🧮 Calculation
🎯 What does this mean for investors?
- Stronger net income boosts valuation, dividend potential, and investor confidence.
- If profits stall while revenue grows, it may signal margin pressure.
📘 Free Cash Flow Growth
📈 What is it?
Free cash flow (FCF) growth shows how a company’s available cash – after covering operating expenses and capital expenditures – has changed compared to the previous year.
🧮 How is it calculated?
🏛️ Why is it important?
Free cash flow reflects real financial strength. Growing FCF indicates more flexibility for dividends, share buybacks, and reinvestment.
🧮 Calculation
🎯 What does this mean for investors?
- Declining FCF may point to rising investments, increasing costs, or weaker operating performance.
- Especially for dividend investors, FCF growth is critical – since dividends are paid from actual available cash.
- A negative trend isn't always bad, but it deserves closer attention.
📘 Gross Margin
📈 What is it?
Gross margin shows how much of a company’s revenue remains after deducting the direct costs of goods sold (like materials and production). It represents the company’s “raw profit” before fixed costs, taxes, and interest.
🧮 How is it calculated?
Or simply: Gross Margin = Gross Profit ÷ Revenue × 100
🏛️ Why is it important?
Gross margin indicates how efficiently a company can produce or procure what it sells. It is a key measure of product-level profitability and pricing power.
🧮 Calculation
🎯 What does this mean for investors?
- A high gross margin suggests strong pricing power and efficient production.
- Falling margins may signal rising input costs or competitive pressure.
- Compared to peers, gross margin offers insights into the quality of a business model.
📘 EBITDA Margin
📈 What is it?
The EBITDA margin shows how much of a company’s revenue remains as operating profit before interest, taxes, depreciation, and amortization.It reflects operating efficiency without being distorted by financing or accounting factors.
🧮 How is it calculated?
🏛️ Why is it important?
The EBITDA margin reveals how much operating income a company generates per dollar of revenue – independent of capital structure and tax effects.
🧮 Calculation
🎯 What does this mean for investors?
- A high EBITDA margin reflects strong core profitability – before accounting distortions.
- It allows for effective comparisons across companies and sectors.
- A stable or growing margin signals efficient cost control and business scalability.
📘 EBIT Margin
📈 What is it?
The EBIT margin shows what percentage of revenue remains as operating profit after depreciation but before interest and taxes.
🧮 How is it calculated?
🏛️ Why is it important?
The EBIT margin reflects a company’s core profitability while accounting for capital intensity (e.g. machinery, infrastructure). It’s especially useful for comparing businesses with different levels of depreciation.
🧮 Calculation
🎯 What does this mean for investors?
- A high EBIT margin shows that the company remains efficient even after factoring in depreciation.
- It’s especially relevant for capital-intensive industries.
- Stable or rising EBIT margins over time are a strong indicator of pricing power and business quality.
📘 Net margin
📈 What is it?
Net margin shows how much of a company’s revenue remains as bottom-line profit after deducting all costs, interest, taxes, and depreciation.
🧮 How is it calculated?
🏛️ Why is it important?
Net margin reflects a company’s overall efficiency – across operations, financing, and taxation. It shows how much actual profit is generated from each dollar of revenue.
🧮 Calculation
🎯 What does this mean for investors?
- A high net margin means the company is not only strong operationally but also manages financing and taxes efficiently.
- Peer comparisons reveal business quality and competitiveness.
- Declining margins despite revenue growth can be a red flag for rising costs or inefficiencies.
📘 Free cash flow margin
📈 What is it?
The free cash flow (FCF) margin shows how much of a company’s revenue remains as actual free cash after covering all operating expenses and capital expenditures.
🧮 How is it calculated?
🏛️ Why is it important?
This margin reflects the true liquidity generated by the business – independent of accounting rules or depreciation. It’s especially relevant for dividends, buybacks, and reinvestment decisions.
🧮 Calculation
🎯 What does this mean for investors?
- A high FCF margin means a company consistently generates strong cash flow.
- It’s a positive signal for financial stability and shareholder returns.
- The long-term trend is key – a declining margin may indicate rising investments or weakening operating efficiency.
📘 Earnings per share (EPS)
📈 What is it?
Earnings per Share (EPS) shows how much profit is attributable to a single share – and is one of the most important metrics for evaluating a company's performance.
🧮 How is it calculated?
The diluted share count reflects potential new shares that could be issued through options, convertible bonds, or other rights.
🏛️ Why is it important?
EPS is the basis for many key valuation metrics like P/E ratio, PEG ratio, or payout ratio. It enables comparisons of profitability across companies, regardless of their size.
🧮 Calculation
🎯 What does this mean for investors?
- EPS captures per-share profitability and is especially useful for comparisons over time or with analyst estimates.
- Rising EPS may signal consistent growth or share buybacks.
- Important: Always use diluted EPS for more realistic valuations – especially in companies with stock-based compensation.
📘 Free cash flow per share (FCF per share)
📈 What is it?
Free Cash Flow per Share shows how much free cash flow a company generates per outstanding share – after investments, but before dividends or debt repayments.
🧮 How is it calculated?
Free cash flow is calculated as operating cash flow minus capital expenditures (CapEx).
🏛️ Why is it important?
FCF per Share reveals how much real cash is available per share – useful for dividends, buybacks, or reducing debt. Unlike net income, free cash flow is harder to manipulate and often seen as a more reliable metric.
🧮 Calculation
🎯 What does this mean for investors?
- High FCF per share signals strong financial flexibility.
- It shows how much capital the company can effectively reinvest or return to shareholders.
- Particularly relevant for dividend payers and capital-efficient businesses.
📘 Short interest
📈 What is it?
Short interest indicates how many shares of a company are currently sold short – that is, borrowed and sold by investors who expect the price to decline.
🧮 How is it calculated?
It reflects the percentage of a company’s shares that are being shorted relative to the total shares available.
🏛️ Why is it important?
Short interest serves as a sentiment indicator: A high value may signal skepticism or bearish expectations – but also increases the potential for a short squeeze if prices rise unexpectedly.
🧮 Calculation
🎯 What does this mean for investors?
- Low short interest usually indicates market confidence in the company.
- High short interest can be a warning sign – or an opportunity if sentiment shifts.
- Especially relevant in volatile markets or ahead of key earnings releases.
📘 Employees
📈 What is it?
The employee count shows how many people a company employs worldwide – offering insights into its size, structure, and business model.
🧮 How is it calculated?
🏛️ Why is it important?
It helps assess operational scale, labor intensity, and cost structure. Combined with revenue and profit, it enables key metrics like revenue per employee or productivity.
🧮 Calculation
🎯 What does this mean for investors?
- A high headcount can signal operational complexity – but also significant growth capacity.
- Revenue per employee is a key indicator of efficiency.
- Especially useful for comparing tech, industrial, or service-heavy companies.
📘 Turnover per employee
📈 What is it?
Revenue per employee indicates how much revenue a company generates on average per employee – a key measure of efficiency and productivity.
🧮 How is it calculated?
The employee count is typically taken from the most recent annual report.
🏛️ Why is it important?
This metric helps compare business models – especially between labor-intensive and technology-driven companies. A high value suggests automation, operational efficiency, or strong value creation per head.
🧮 Calculation
🎯 What does this mean for investors?
- A high revenue per employee indicates a scalable and margin-strong business model.
- A low figure may reflect labor-intensive operations or lower value-add.
- Especially helpful when comparing tech companies to industrial or service sectors.
MamaMancini`s Holdings Inc Stock Analysis
Analyst Opinions
14 Analysts have issued a MamaMancini`s Holdings Inc forecast:
Analyst Opinions
14 Analysts have issued a MamaMancini`s Holdings Inc forecast:
MamaMancini`s Holdings Inc Events
Past Events
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SEP
3
Q2 2027 Earnings Call
14 days ago
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JUL
2
Shareholder/Analyst Call - Mama's Creations, Inc.
3 months ago
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JUN
8
Q1 2027 Earnings Call
3 months ago
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APR
14
Q4 2026 Earnings Call
5 months ago
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FEB
24
Analyst/Investor Day - Mama's Creations, Inc.
7 months ago
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DEC
8
Q3 2026 Earnings Call
9 months ago
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SEP
8
Q2 2026 Earnings Call
about one year ago
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StocksGuide Free
MamaMancini`s Holdings Inc — Q2 2027 Earnings Call
1. Management Discussion
Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to Mama's Creations, Inc. Second Quarter Fiscal 2027 Earnings Conference Call. [Operator Instructions] This conference is being recorded today, Thursday, September 3, 2026, and the earnings press release accompanying this conference call was issued after the market closed today. On our call today is Mama's Creations Chairman and CEO, Adam L. Michaels, and CFO, Anthony Gruber. Before we get started, I'd like to note that some of the statements on this call will be forward-looking statements that reflect management's current expectations about future operating and financial results. Although management believes their expectations and assumptions are reasonable, they remain subject to significant risks and uncertainty, and actual results for future periods may differ materially from what is stated or implied during today's call.
For more information, please refer to the forward-looking statement section in today's press release and the risk factors disclosed in the company's most recent Form 10-K and any subsequent reports it files with the SEC. Please also note that today's call will include a discussion of adjusted EBITDA, which is a non-GAAP financial measure. Important information, including required disclosures containing a reconciliation to the most directly comparable GAAP measure, is also detailed in today's press release. At this time, I'd like to turn the call over to Chairman and CEO, Adam L. Michaels. Adam, the floor is yours.
Thank you, Luke, and thank you to everyone for joining us today. I'd like to welcome you to our second quarter fiscal '27 financial results conference call. The second quarter was another step change quarter for Mama's. Thanks to the creativity of our sales team, the resilience of our operations team, and the increased capacity from the acquisition of Bay Shore, we grew revenue 55% to $54.6 million and expanded adjusted EBITDA 69% to $5.5 million. Though the real story of this quarter is not the impressive growth rate, but the shape of it. Every single bottom line metric grew faster than revenue. Income from operations, adjusted EBITDA, and net income, which more than doubled. Overheads did not grow with the business. It shrank as a share of it, and gross margin turned back up sequentially as the items we launched in Q1 settled into steady-state production, with room still to run.
Anthony will take you through the detail, but what I want you to hear is the sequence, because it is exactly the one we laid out three months ago. Invest into the launch, then harvest the leverage. And this team delivered without skipping even a beat on new distribution gains. Looking forward to potential future M&A, we also fundamentally changed the kind of transaction this company is capable of pursuing. Following our recent offering, we closed the quarter with over $138 million cash war chest and virtually no debt, supported by the strong operating cash flow the business generated on its own. Until now, the size of the opportunity we could chase was largely set by the size of our balance sheet. The dynamics have changed. We can pursue accretive M&A that brings incremental capabilities, capacity, or customer access into the platform, and we can do it from a position of strength.
As always, regardless of the size of our increasing war chest, we will remain as steadfast and disciplined in our approach as we did when we started this journey four years ago. Before we get into the quarter itself, let me spend a moment on the macro trends because it keeps getting better. One of, one of the earliest lessons I picked up in my career is that catching an existing current is far easier and far cheaper than trying to manufacture one of your own. In June, McKinsey published research naming the shift from restaurant to ready-to-eat grocery meals as one of the top themes reshaping the entire grocery industry. And, I mean, right up there with e-commerce, retail media, and even AI.
Roughly one in four consumers now buy grocery prepared food, specifically as a substitute for ordering from a restaurant, most often replacing quick service and fast casual occasions. And, here's the line I keep coming back to. Prepared foods, by far, the leading driver of trip frequency across every single section of the store. Not one of the drivers, the leading driver, which means that the strategic alignment we have with our retail customers is getting deeper, and our value to their business is only getting stronger. If that's not enough, GLP-1s are only accelerating it. Consumers are walking past the packaged snack aisle and reaching for a high protein meal instead. We continue to be in the right place at the right time with the right product portfolio. And now, finally, with the balance sheet to capture far more than our fair share. And then, there is one that made me smile the most when I sent it to Chris and Lauren. The Wall Street Journal and Yelp have both now put a name to a consumer trend called grandmacore. Slow cooked, simply made family recipes, food that tastes like somebody who loves you made it.
Yelp named it a 2026 dining trend. Rubix Foods found that 44% of consumers would rather a brand improve a familiar favorite than chase a trend. Fellow shareholders, we did not pivot into this. Anna Mancini carried her meatballs and sauce recipe through Ellis Island 105 years ago. For most brands, grandmacore is a marketing stunt. For Mama's, it is our founding principle. So, the current is strong and the playbook we run has not shifted one iota.
Cost, controls, culture, and catapult, our four Cs. Starting with our first C, cost. I'm excited to report that thanks to Skip and his team, we officially opened the new expansion of the East Rutherford, New Jersey facility at the end of last month, nearly doubling frozen and refrigerated storage capacity, which will reduce our outside storage costs as well as increase logistics flexibility. In addition, as our associates come back from their Labor Day break, they'll be coming home to a new break room, locker rooms, and training spaces in our signature Mulberry color palette and our values on the wall throughout, thanks to Lauren and her team. Our New York facilities continue to merge and blur, sharing equipment and people across facilities. Our new Walmart launches and recent Sam's launch would not have been possible without the Bay Shore facility and our Bay Shore associates. With the added volume of new items across Walmart, Sam's, Albertsons, and BJ's, the Bay Shore facility continues to steadily improve towards our goal of margins being in line with our East Rutherford and Farmingdale gross margins as promised.
Finally, continued improvements in below-the-line direct variable costs continue to be captured as our first half freight, royalties, and commissions percentage is below prior year. This allows our operating margins to show up exactly where it should. Operating expenses fell 160 basis points as a percentage of revenue year over year, and margins improved sequentially off the first quarter. All of this with plenty of room to grow. On gross margin specifically, in June we told you that labor and raw material inefficiencies tied to the startup of new packaging technologies and protein form factors were front loaded investments, not a new normal. The second quarter was the first proof point.
Margin improved sequentially to 24.0% from 23.6% while spending more trade in Q2 than in Q1 and spending over $1 million more in high ROI trade versus prior year. We remain firmly on track with our mid- to high 20% corporate gross margin target as those items move fully into steady state. Moving to controls, our second C, I am proud to share that we continue to invest in more data analytics to expand our Power BI efforts, now incorporating AI plugins, thanks to Melissa and Lauren. This is providing faster, more granular, connected information, delivering savings in materials, production efficiencies, and inventory management. Our singular ERP system allows us to provide more visibility to our teams, real-time performance management, and benchmarking across each of our sites. Another great example of our controls is the impactful work that Alberto is doing with his procurement team. Since Alberto has joined, we have completely reimagined our supplier base. We have consolidated in some places and opened the aperture in others.
For example, recent changes with our packaging supplier base avoided a 12% increase in materials through vendor diversification and business migration. We've added three new beef suppliers, increasing our quality even further without increasing our costs, sharing the benefit with our customers and end consumers. Another huge benefit Alberto brought to the team is his experience with supply planning. The enhancements he has brought to Mama's is allowing us to add further safety stock levels to our top 10 items, facilitating absorption-based production, reducing our costs while increasing our customer service levels. Now, if that is not a win-win, I'm not sure what is. I will continue to simply repeat what I said last quarter. In an industry where food safety sits at the top of every conversation, the discipline this team demonstrates across all three facilities is nothing short of remarkable and nothing we ever take for granted.
Our third C, culture. I'm ecstatic to share that last month, Yun Lee, our first ever Chief People Officer, joined us with over 25 years of experience building and leading high performing organizations. I could not be more excited to partner with Yun and the rest of the people operations team to maintain and enhance the same entrepreneurial passion and spirit that got us to where we are today. With Yun coming on board, we've been able to supercharge our capability building. In Q2, we grew our team and our capabilities by onboarding more than a dozen new operational leaders in functions like food safety and quality assurance, enterprise safety and production management, bringing new capabilities that did not previously exist within the organization and upgrading leadership across critical functions to strengthen the infrastructure required to support continued growth and scale. All these hires bring energy, experience, and renewed engagement throughout our entire organization. I am so proud to add seats at Mama's dinner table and excited to see what our new family members can do. Another great example of culture is the new innovation lab that Chris and his team have built to wow and excite our customers in only a way Mama can.
Appropriately and playfully called Mama's Secret Pantry, this is an experiential space that key partners will be invited to, to co-create and collaborate to exceed and excite our consumers. I can't wait to share more about the space and, more importantly, the future wins coming out of this unique experience. We are not here just to win at the prepared foods game. We are truly redefining it. As Abby keeps reminding me, culture is not a destination. It is a mindset that needs love, attention, and reinforcement every single day. And I will say this about the quarter we just had. We raised more than $100 million on the strength of a proven story this team wrote with their own hands.
The capital markets did not fund a theory. They funded a successful track record that was written down and codified four years ago by our over 600 associates. And for that, I am truly thankful. Our fourth and final C, catapult. This is where the quarter really showed itself. I am honored to announce that next month we officially launch, for the first time, in banner Kroger. We will start in the Louisville division in over 100 stores with four items, three of which are chicken bottom SKUs.
I cannot express how impressed I am with Chris and the sales team. We set an audacious goal, literally three months into Chris's tenure, to get into the top three food retailers in the country. And Chris and his team delivered ahead of schedule. The Board and leadership team keep setting up the pins and Chris and his sales team keep knocking them down. Congrats to the entire team. If that's not enough, we recently heard from Costco that we have been confirmed for a second half multi-vendor mailer, MVM. Their most productive promotion nationwide, across all eight regions. To me, this is much bigger than just more revenue, which is forecasted to be ahead of prior year, but rather a testament and reinforcement of the terrific partnership Scott has built over the past four years. As a reminder, Scott has taken this business from about $0.5 million four years ago to over $25 million last year.
Now, that is a partnership. And having all eight regions eagerly sign up tells me that Anna Mancini's recipe is doing just fine west of the Mississippi. But I hope I don't make it seem that there's only one or two customers. In Q2 and upcoming in Q3, we have new placements launching in over a dozen new customers, new and existing. Over a dozen new placements launched in Q2 with more than 60% using chicken bottoms. And coming up in Q3, over 2 dozen new placements have already been approved. That is the one-stop-shop model at work. In Q2, we scaled our marketing efforts while putting our most comprehensive launch support yet behind new distribution.
Across our retail media platforms, attributed sales increased nearly 30% versus Q1, while delivering nearly 90 million impressions. Walmart continues to be a standout as we increased our investment behind our expanded assortment, attributed sales were up more than 50% from Q1, while still generating a very healthy double-digit return on ad spend. What excites me most is that we're building a repeatable playbook around our launches. For our seven new Walmart items and our Target beef meatball launch, the team surrounded the distribution with ratings and reviews, PR, retail media, social and influencer support. We generated more than 2.6 million potential impressions through earned media, collecting 225 product reviews to help build trust and conversion, and activating 50 micro-influencers.
We also had our biggest presence ever at IDDBA this year, with our largest booth to date and a strong presence across the show floor. We had the opportunity to engage with nearly all of our major customers, not only around the breadth of what we could offer them today, but where we are going next. And for the first time, we shared early stage innovation concepts with customers, giving us the opportunity to bring their input into our innovation pipeline before those ideas ever reached the shelf.
And finally, the team isn't limiting marketing to consumer activation. We tested strategically placed outdoor media in key markets in Q2 to excite our existing customers and as well as some prospective holdout customers. If you think FOMO is only afflicting Gregory and Alexander, you have not met the EVPs of some of our customers. Looking to the balance of fiscal '27, our priorities are unchanged. Ramp the new branded introductions across Walmart and Target, keep executing it against our goal of net plus two SKUs in each of our top 10 accounts, pull efficiency, margin, and absorption through the three-plant network as recent launches reach steady state, and now with over $138 million of cash on the balance sheet, put capital to work behind capacity and accretive M&A.
Looking forward, the company I see in front of me bears very little resemblance to the one we ran even 12 months ago, 3 plants, a broader and still expanding customer roster, a balance sheet with real firepower, and a team that has demonstrated in practice, not in theory, that it could integrate acquisitions and execute with excellence across the plant. Our line of sight to $1 billion in revenue has never been sharper, and I am convinced in our ability to compound profitable growth well into the future. I'd now like to turn the call over to Anthony Gruber, our Chief Financial Officer, to walk through some key financial details from the second quarter.
Thank you, Adam. Moving to the financial results. Revenue for the second quarter of fiscal 2027 increased 55% to $54.6 million as compared to $35.2 million in the same year-ago quarter. The increase was primarily due to the ramp of the new branded items we launched with major retailers in the first quarter, item expansion at new and existing customers, and the contribution of the Bay Shore acquisition. Gross profit increased 49.1% to $13.1 million, or 24% of total revenues, in the second quarter of fiscal 2027, as compared to $8.8 million, or 24.9% of total revenues in the same year-ago quarter. Importantly, the prior year did not include Bay Shore as it was prior to the acquisition of the same. Gross margin improved sequentially from 23.6% in the first quarter as the new packaging technologies and protein form factors deployed to support our Q1 launches moved towards steady state production. We remain on track toward our mid to high 20% corporate gross margin target. Operating expenses totaled $10.1 million in the second quarter of fiscal 2027, as compared to $7.1 million in the same year-ago quarter.
As a percentage of revenue, operating expenses declined 160 basis points to 18.5% from 20.1% in the prior year quarter, demonstrating the improved operating leverage in our model as we scale. The change in absolute dollars was primarily attributable to the Bay Shore acquisition. Net income for the second quarter of fiscal 2027 increased 100.9% to $2.6 million, or $0.06 per diluted share, as compared to net income of $1.3 million, or $0.03 per diluted share, in the same year-ago quarter. Second quarter net income totals 4.7% of revenue as compared to 3.6% in the same year-ago quarter.
Adjusted EBITDA, a non-GAAP measure, increased 68.9% to $5.5 million for the second quarter of fiscal 2027 as compared to $3.3 million in the same year-ago quarter. Adjusted EBITDA margin expanded to 10.1% of revenue from 9.3% a year ago. Turning to the balance sheet, cash and cash equivalents as of July 31, 2026, totaled $138.6 million as compared to $20 million as of January 31, 2026. The increase was primarily driven by $108.6 million of net proceeds from our July common stock offering, together with $11.9 million of cash provided by operating activities during the first six months of the fiscal year. As of July 31, 2026, total debt stood at $4.8 million. This balance sheet, combined with our credit facilities and strong cash flow generation, positions us well to pursue the organic and inorganic growth opportunities that Adam described. This completes my prepared comments. Now before we begin our question and answer session, I'd like to turn the call back to Adam for some closing remarks. Adam?
Thank you, Anthony. As I turn the page to the balance of fiscal '27, our priorities are consistent. First, we will continue to optimize the integrated three-facility network, pulling efficiency, margin and capacity utilization forward. Second, we will press the accelerator on retail distribution, leaning into the Walmart, Target and now Kroger ramps, while continuing to deepen our partnerships in the Club channel with our upcoming Costco MVM, as well as the new Sam's Club and BJ's launches. And third, we will deploy the big balance sheet we've built to selectively pursue accretive acquisitions that bring incremental capabilities, capacity, or customer access into the platform. The $40 billion deli-prepared foods category is large, still expanding, and remains highly fragmented.
The consumer trends, fresher formats, higher quality protein, value-oriented meal solutions, and now a genuine cultural pull towards the food our grandmothers made, continue to break in our direction. Retailers, in turn, want a partner who can simplify the deli prepared meal space, deliver consistently at national scale, and bring real innovation to the case. This is precisely the role Mama's Creations is built to play, and our long-term vision of becoming the leading national one-stop-shop deli solutions provider has never felt more within reach. To our team across all 3 facilities, thank you for the energy, the ownership and the relentless execution. And to our shareholders, including the many of you who joined us in July, thank you for your continued trust in our team. I have never been more convinced that the most exciting chapter of Mama's Creations is the one in front of us. With that, operator, let's open the line for questions.
[Operator Instructions]. And your first question comes from Jon Andersen with William Blair.
2. Question Answer
Yes, good afternoon everybody. Thanks for the questions. I thought I'd start with I guess your announcement of achieving distribution with I guess kind of the third strategic account you were targeting, Kroger. Could you talk about how you kind of got there with the relationship, what the initial launch looks like, and how you're thinking about maybe the roadmap to building the relationship over time?
Yes, thanks Jon. Look, as always, a tremendous team effort. Chris has great long-term relationships with Kroger well before him joining Mama's. We speak often about having relationships at the top and then equally at the buyer level is another thing. And then it's another good example of actually some of the work that Lauren and Chris did partner together on from a marketing perspective. We did some creative marketing around the Cincinnati area and it worked out. And again, we've had some conversations. Chris has been talking to them for some time. This is the type of stuff Mama likes, right? Let's start smaller, let's start in one division, let's start strong with the items that are great, right? Our strong meatball items and chicken items that we know that have strong velocities and then slowly, you know, slow and grow.
So very excited. Again, you start small and you build out. And, you know, I think Kroger has maybe 13 -- banner Kroger has about, let's call it about 1,300 locations, you know, start with 10% of the business and then work your way up. So really happy, really appreciative of all the work that Chris and the team have done to get here. And again, I think this is something that's really important and it's been the past four years here at Mama's. We tell you what we're going to do and we do it. We started three years ago. We said we'd get in one a year, two years ago we did Walmart, last year with Target, and now with Kroger, again, slow and steady. So yes, very proud of the whole team.
Yes. Congratulations on that. Kind of sticking with important customers as well for a minute. I wanted to ask about the MVM with Costco in the second half. Is that, I guess that's a new kind of new disclosure. How recently did that kind of come together? And can you size it for us? Like you talked about how that relationship has become a $25 million relationship as of last year, based on the plans that you now have in place for the current year. How does this affect maybe the second half outlook in the Costco business in aggregate? Do we grow it this year in other words? What are any margin considerations that we should take into account as a result of this as well?
Yes. No, absolutely. Again, another great team effort and just as much, and we all say it as a leadership team, just as much of the great sales work Scott, in this case, has been able to do. You can't do anything without operations and Skip and his whole team making sure that we can actually deliver and exceed expectations is just as important as getting it in. Yes, that we, we are speaking to the Costco team has if not every day, certainly every week. There's constantly rotations that I guess we don't even share all the time because it's constantly happening. The MVM, I don't know if it's technically started yet, but we're in four of the regions right now, and we're not even talking about it. So great relationship, yes. We were voted in as you know, well, there's eight regions, eight regions have to vote on it. And we, we got voted in for all eight regions.
Um, I think we're probably in about four regions as we speak. And by next month we'll be in all eight regions. I did share that this rotation is forecasted planned to be bigger than last year, which is great. We'll have to see how things go and how the velocities keep moving. Another thing you know about us is we keep to our margin profiles. And what's really important and, again, another thing that's just wonderful about the Costco partnership is it's not something that -- I know some companies will sell at a loss to get into Costco. That is not us whatsoever, as everybody knows. This is a great win for Costco's end consumers, great for Costco. Velocities keep moving higher and higher, and that's why you're seeing the repeat of the MVM and more and more rotations. So it's a great testament to Scott, the whole team, both sales and operations.
Great. One more, I'll get in the queue. It feels like, at least relative to, I guess, our estimates for what that's worth, that maybe there was a little bit more OpEx leverage in the model this quarter, a little less on the gross margin line. Are there some decisions, planned decisions you're making there around how you're investing? Maybe moving some marketing dollars into trade based on the desire to support some of the branded launches or am I overreading that we're still kind of progressing as -- progressing as planned.
No, you are a very good reader, musician and reader all at once. So impressive. No, you're absolutely right. So let's be very specific. We very intentionally moved about $0.5 million. That's a full point of margin out of marketing into trade because we were seeing higher effectiveness and great returns, again, as you're seeing. So you're absolutely right.
I could have easily increased gross margin a full point, legitimately, right? $0.5 million, a little more than $0.5 million is about a point of gross margin. Our goal is long term. I know this team and this team knows we have to deliver every 91 days for you guys, but we are building a $1 billion business. And if that means that we're going to invest a little more this quarter, I'll give you another number. We spent more than $1 million. That's two points of margin. We spent over $1 million more in trade this year than we did last year.
Again, as long as we see the ROIs, you guys know what gets measured gets improved. We understand the effectiveness of every promotion that we're doing. If it does well, we'll do it again. If it doesn't do well, we're not going to do it. But we are spending more on trade, more than $1 million, more than we did last year because we're seeing the effectiveness and we will continue to invest behind the business to drive higher velocities, to exceed our customers' expectations so we could drive more items into the store, like you're seeing. And, like my boys say, a little bit of FOMO. And Chris is getting a lot of phone calls from customers saying, hey, why don't we have that item? And that's a wonderful thing.
Your next question comes from George Kelly with ROTH Capital Partners.
Just to start, I think I heard in your prepared remarks that Sam's Club took an additional item. Did I hear that right? And can you detail, like, what the item was and when it went in?
Yeah, again, great team effort. Again, this was another great example with partnership with operations. This was a new product for us, a Panko chicken that just went in, I think literally -- I think this week possibly. So it's probably not even through the whole system yet. But yes, excited, breaded chicken breast. As you know full well since you've been with us the whole time, this is a chicken bottom, which you know is critical for us. But yes, really great example. I'll give you another thing that's so special about this product. Yeah, I'll just leave it at great team effort. So really happy with it. So yes, new item just came into Sam's.
And it's going in all stores?
Let me get back to you on that. I forgot to ask Chris that question. The orders are quite nice, so I think so, but let me get back to you on that. I'll get it from Chris, exactly how many stores.
Okay, sounds good. And then next question on Walmart. Just hoping you could update us on number of stores and how the velocities are progressing and just any kind of update on what you're seeing at Walmart and maybe if there's products that are working especially well or not working as well. All that would be helpful.
Really happy for how things are going. I think we -- I looked the last time, and we're now over 2,300 stores. So I think when we first started, I think we said around 2,000. So I think we're now north of 2,300 stores. So definitely getting more stores, definitely seeing greater velocities. Good or bad, the grilled chicken is just exceptional, and that is always the winner. And we're seeing velocities literally go up every week. It's crazy that we could see this.
There's some items that are not doing as well. My wife taught me I'm supposed to love all my children equally. We have a sausage and peppers in the store. We have a meatloaf in the store. Chris and I discussed. We always know that at some point we want to take some items out, proactively actually, and bring in items with higher velocities. Those items tend to see a little lower velocity than our beef meatballs and cheese stuffed chicken meatballs. So we definitely see all, actually we have nine items in there. Chris and I -- Chris speaks with his team all the time looking at it, and I promise you we are very proactive. It's not going to be Walmart that says, let's take this item out. It's going to be our team that says, hey, Walmart, I'm seeing -- I have this better item for you. Why don't I just pop this one in, take this other one out? So we're looking at that every week.
Your next question comes from Ben Klieve with StoneX.
Congratulations on a good quarter here. You talked about the flexibility you have with your balance sheet now for M&A ambitions, and I'm wondering if you can elaborate on this a little bit. I'm wondering, first of all, the degree to which the kind of smaller opportunities that you had been historically pursuing are just less enticing to you now that you have more flexibility. And then also can you kind of distinguish between the characteristics of some of the smaller operations that you were looking at versus the more transformative ones both in terms of the quality of the operations and the multiples that you have to pay.
That's a lot, Ben. Thank you. So, yes, I think we understand, we've done this a number of times as a team here between the Chef Inspirational, Creative Salads, Crown, and obviously I've done one or two or more before coming here. Integration takes work, takes effort. And quite honestly, just it probably just doesn't make sense to buy a $25 million revenue company anymore. The great news is there's also lots of benefits to that, right? Because some of the bigger companies have more capabilities. Remember, for us, it has nothing to do with revenue. It's all about capabilities. It's all about getting new customers. It's all about bringing in great culture with our people. And yeah, what is wonderful about this last raise and I've shared it when we did the raise, there were a couple companies that we were looking at that they said, yeah, sure, Adam. This is the grown-up table here next time.
And by having the raise and everyone sees it, we get a call back. Actually, I was sort of just joking. I would love to talk to you. So I think it has brought us to a different place. The conversations that we have had, I will tell you, as great as -- Chris is doing in sales and Skip's doing in operations, and Anthony and Lauren and the whole team, I'm keeping them busy. I took Chris and Skip on a bit of a vacation over the past couple weeks for a couple tours of places. We're getting busy, which is wonderful. It's what we should be doing. But, yes, it has to be meaningful. It takes a lot of time for us to do the diligence. It takes a lot of time. So it just doesn't make sense to buy, and I'm making up what that number is, but that $25 million company is just too small. So we're looking a little bigger, but obviously anyone that knows me knows that -- just like how we manage our money, just how we look at multiples. It doesn't matter how much money we have. We are as diligent as we were when we actually had no money -- sorry we had negative $15 million of debt when I -- when Anthony and I first started.
Very good. That's helpful to hear that perspective. Very good. Well, congratulations again on a great quarter and having a seat at the grown-up table, as you say.
And just before the next one, since Chris is an overachiever, George, we're starting with 300 clubs with the Sam's breaded chicken.
Your next question comes from Ryan Meyers with Lake Street Capital.
Congrats on another strong quarter. I wonder if you could just talk about what needs to happen in the back half of the year to trend toward that mid to high 20s gross margin target, maybe the kind of high 20s. What you would need to see to get closer to that as we exit the year?
Yes, I mean, look, I think, and I like that it's consistent. There's really three things that, and again, I hope we can all agree that 24%, never enough for me, but 24% is mid to high 20s. There's three things that placed us at that 24% this quarter. The first one we mentioned earlier, right? We are investing in trade. We were very intentional to take $0.5 million of marketing and put it into trade. That's a point of margin.
The biggest one, which we've been talking about for some time now, is we need to keep selling the bottoms, right? I just told you three of the four items at Kroger are chicken bottoms. The new Sam's items, chicken bottoms, I could go on forever. It's a great problem to have. Chris and team are just too good at selling the tops. The portion chicken is just exceptional and we just need to, as a percentage, just sell more and more of the bottoms. That's going to allow us to trim more.
Operationally, we could trim. Skip and team could trim all day long, but we have to sell a higher percentage of the bottoms because we said a day of trimming, if there's five days in a week, a day of trimming is about a point of margin. We're probably still in that one to two days of trimming, which to me says that there's two to three more points we can get. We could just increase the percentage, not the absolute money, the absolute. We've added, I think we added more than $10 million of chicken bottom sales versus last year, which is an incredible job. It's the percentage that we need to have, and that two to three points.
And then I think the third, I'm so proud of the Bay Shore team. We are moving really nicely, probably ahead of where Anthony and I had planned. I love what the Bay Shore team's doing. They're still probably, I'll make up a number roughly of a point of margin there to get that up to the corporate average. So right then and there, that's what, four to five points, right? One, two to three, and one. So that's four to five points. That says that we're 28%, 29%. We need nothing special. We need nothing. We don't have to cure any major diseases. These are blocking and tackling things that if we can do right, we're absolutely there to do it. So hopefully that adds some color as to how the leadership team thinks about and makes trade-offs, right? So the trade, we make trade-offs.
One thing that's great that Chris is doing now and makes you feel good that we could continue to trim, we could continue to sell more of the bottoms is we actually accidentally forget to bring the portion chicken when Chris pitches it, right? When we have tastings and cuttings, we accidentally forget the portions. Everyone knows about it. Like, literally Chris sells stuff sight unseen. That's how amazing that is. But we are trying to do things. Another thing that Chris and team do is if we, if you want the portion chicken, you have to at least buy chicken strips or you have to buy chicken meatballs, or you have to buy MFOs with chicken or you have to buy the shredded chicken. Again, we have a great, Lauren helps lead our NPD process. We have tons of chicken bottom items. That's another great thing that Chris and team do to increase the likelihood that we could continue to increase the chicken bottom percentage.
Got it. That's helpful. And then just lastly, as we think about the momentum across the business and the new placements you're expecting in Q3, how should we think about the growth rate in the third quarter and the fourth quarter? Obviously, we're now lapping the Crown acquisition for the first time in a couple of quarters. So any commentary you can give us on how you're thinking about revenue growth. I mean, I know you've talked in the past that you're comfortable with double digits. Does that still apply? Just any commentary would be helpful.
Yes, I'm not going to move off that. And again, I think we're, I don't know, I think, 17 on over-delivering our revenue targets. But look, double-digit, I hope you guys see from whether the Kroger stuff, whether the Sam's stuff, actually, just all the stuff that we already have. Walmart is still, we're not even in our first full year of all the Walmart items. I hope everyone feels, and we feel internally -- this makes us very confident that we could achieve that double digit growth. And what's important, more important than any revenue growth, is profitable growth. And you guys know that about me as well. So we're still doing cleaning of our portfolio. There's still more stuff within possibly the Bay Shore portfolio, but every day, every quarter, this is something that Chris and Skip look at to drive more efficiency in our processes. And if that means losing a little bit of less profitable revenue so we can have a more profitable business. We hold hands together and we make the right decisions. So it's profitable growth, increasingly profitable growth, that is the important question and the important thing that we focus on.
That's great to hear and congrats on the continued progress.
Your next question comes from Eric Des Lauriers with Craig-Hallum Capital Group.
Congrats on another strong quarter here and all the continued momentum on these product wins. My first question here is kind of going back to the gross margin outlook. Obviously, chicken bottoms are a big driver of that. You mentioned 60% of the Q2 product placements use chicken bottoms. How should we think about the mix of these two dozen new product placements for Q3? How do you think about the mix of chicken bottoms for those?
So again, what's wonderful is much of it is the chicken bottoms. It's something we focus on. I shared the Q2 numbers. We have to see how Q3 goes. It's also the volume. So one thing that I will, that -- not that we get challenged, but we have to see how it does. It's up to the end consumer, right? So Chris and team make sure that we are selling more bottom items in than top items, right, that we know. What we don't know is the velocity of those items and which one's going to sell more than the others.
What has been happening, and again, such a horrible problem that I believe every publicly traded company wants, every company wants, the portion chicken, even though that's one versus the four bottom items, the velocities of that portion chicken item just moves at a lot faster pace. And that's where we run into the "challenge" of the chicken bottom percentages not growing as fast as the portion.
So we are doing our job. We are, like I just mentioned, we don't sell in a top if the bottom doesn't come with it. But we have to see how the items land from a velocity perspective. I'm optimistic, I feel good. Obviously the leadership team, we know all the items that we're getting in. I'm optimistic that we could continue to increase the percentage of the bottoms, which will lead to, again, if I could just get one more percent right, one more day of trimming that gives me one more gross margin percent, which obviously would be really helpful.
Another point I know, because Bay Shore keeps getting better, I think we're going to be in exactly the position we expected to be a year ago. I think we're going to get one more at Bay Shore and okay. So now that 24 is 25 and 26 and we feel good that just like we sequentially improved versus last quarter. I feel good that we will sequentially improve in Q3 versus Q2.
On Costco, congrats here. That sounds like quite the win. So you mentioned you expect it to be larger from revenue perspective year-over-year. You also mentioned that it's already started, at least in some of the -- some of the regions. If I recall, I think last year's was just around the holiday season, so a bit shorter here. Can you just comment on maybe the scope of this MVM compared to when you had last year whether that's a number of weeks or number of items? Just any additional color there would be great.
Yeah, it's going to be roughly the same time. Actually I think it's a little longer. I don't remember starting this early last time. And the other thing that's really important, and I do, I want everyone to be proud of the MVM. I want everyone to be excited. I think the MVM's going to be actually at the same time as last year, the last two weeks of December or the beginning of January. I know everyone likes to see it in the print, mailer, you're going to see that.
What I see, but what's important is, the business is so integrated now. Like I just told you, we're doing rotations before the MVM even starts. So I feel really good. Again, we mentioned from an MVM perspective, the order, the intention from Costco is that this is actually going to be bigger. We're already getting orders in. It is going to be bigger than last year. I think it's going to be a little longer, right? I don't remember it starting this early last year, but, what's really important is this is continuing to strengthen the relationship. It stays in longer, right? That's what -- if you remember what happened last time, the "MVM" was supposed to end in January and some regions "forgot" and they just kept buying into February. That's what we're looking to do. Just like we spoke about last time. So we are an everyday item now in the Northeast. It doesn't come out.
The MVM will, because of the promotion, there definitely will be more volume, but we're there every day. Same thing with the San Diego region. Try to make my parents happy. It's already in the Southeast now. So that's what's really important for it.
Certainly, encouraging on all fronts on Costco. Congrats again.
Your next question comes from Matt Curtis with D.A. Davidson.
I just had a question on Bay Shore for starters. Could you bring us up to speed on where Bay Shore's gross margin stands today relative to the other facilities. And I guess to ask it another way, how much of the original margin gap has been closed at this point?
Yes, so we don't have business P&Ls. So much of the stuff, and I think I mentioned earlier, the legacy Walmart stuff, we're actually doing in Bay Shore now and vice versa. Actually the Shaw's shredded chicken, we're doing in Bay Shore. So we don't have, kind of, line item. We run the business as one business. What we're seeing and why we're feeling confident is the absorption. So what was really big when we started was the Bay Shore facility was a big facility. It was twice as large, or it still is, twice as large as our other facilities, and didn't have the volume.
What's been wonderful, thanks to our sales team, is we have filled up the Bay Shore facility with more volume, which is lowering as you understand the overheads percentage. The other thing that's happening is the Bay Shore legacy Crown items, thanks to Alberto, the procurement team, we've gotten significant savings on beef and on chicken and on other ingredients. So the so what is, I believe, we're -- when I speak to you guys next quarter, that -- there, we won't see any of that. Again, more the word, like the words I said, the blurring, it's going to look one and the same. So, directionally that's how we're able to figure out what where the margins are in the legacy facility.
So I guess maybe to ask a related question, at this point, how much unused capacity do you still have at Bay Shore after supporting some of the recent launches that you talked about.
So we certainly still have lots of capacity there. We're not working seven days a week in all parts of the facility. We're not working actually 24 hours in all parts of the facility. So there's definitely a lot more room. It's a function of the items that we sell in and what we do with them. So I still feel very good. Look, we're growing, which is great, but I'll stick to what I said last time and nothing's really changed.
We could pretty much double our business from last year with the current facilities we're in. The other one that I don't want to forget, and everyone's always welcome to come in. I really love, I got some good pictures for you. We are opening up. I mentioned, thanks to Shane and team. We doubled our East Rutherford facility this quarter. So a lot more cold storage, freezer storage, something I'm so proud of, a lot more room for our associates. So we have training rooms now. I'm so excited, Yun and Abby and team. We're doing trainings. A much bigger cafeteria, walls of microwaves, so we definitely have a lot more room.
What we have to keep doing is using it more efficiently. That is the key. So we just brought in two new Proseal machines. So we have automated, again, for many folks that have started, if you guys have taken tours with me, in our Farmingdale facility, we used to use pretty much hand sealers to seal, I'll give you an example, something like the Walmart chicken that we do. We literally used almost hand sealers, this machine, it was -- sorry, let's call it a tabletop machine.
We brought this Proseal machine in. It's amazing. Literally Milton and Lenny, we literally get done what we used to be able to get done for a day. By noon, we have it done. So it's not about the physical space. We have to continue to bring more automation in and use the space we have more efficiently, but I'm not -- we have room to grow. I'm not worried about that quite yet.
Your next question comes from Nick Sherwood with Maxim Group.
So seafood seems like it's a pretty important part of the prepared meals categories. How much of a priority are you putting on adding seafood capabilities when you're evaluating M&A options? And what do you see as some of the challenges of, kind of, integrating a product that would have a very different procurement and production infrastructure.
And for a guy who likes seafood, I'd like that very much. So there are a couple of things we have to do. First, what's wonderful, actually, Bay Shore used to make seafood products. So they have some of the capabilities and obviously the know-how. It's not that easy in the sense that I'm sure, and I'm speaking at a turn here, but we need different HACCP plans, USDA, approvals to get it back. But first of all we have plenty of room to run. Remember, $40 billion category, as great as we're doing with beef and chicken and vegetables, Chris would be the first one to tell you that we still have tons of room to grow. But it's also, maybe that's an M&A opportunity. Maybe there's special equipment, there's special handling, there's a company that I'm speaking to now that I know, I've seen. They have seafood items, so maybe it's an M&A approach. But it's absolutely something that should make all of our investors feel good that, wow, these guys are doing this well, and they're missing an entire segment, right, in seafood. And when we are $1 billion, I have no doubts that there will be a seafood element to it.
I appreciate the detail. And then I noticed that you had expanded placements at Sheetz. Can you kind of talk about how the opportunity and the convenience channel has progressed?
Yes, no, it's -- so actually I'll tell you, so yes, we got some new stuff in the Sheetz. I think have some new paninis coming in and some new wraps, but the C-Stores is still one and Chris and I speak about it. That's one that I would have said a couple years ago it would have been easier. We have the right partners, right? We have a distributor partners. We now have the right portfolio of items. We have these paninis are doing exceptionally well. We actually made smaller paninis now, so it's a better price point in addition to the ones that we have. I told you about these wraps. I will still believe the meatballs in a cup solution somehow will come around for us. So we have the right third-party partners with distributors. We have the right portfolio. And again, the team will keep trying. But, yeah, we're in some places, but there's still a lot of opportunity.
And at this point, we have no further questions, so I'll hand the floor back to Adam Michaels for closing remarks.
Thank you, operator, and thank you again to each of you for joining us today. To close, the second quarter of fiscal '27 delivered on the promise we made in June. Revenue up 55%, net income up 101%, adjusted EBITDA up 69%, operating expenses down 160 basis points. Our first ever win at Kroger, another even bigger Costco MVM, and much, much more. All with a balance sheet carrying $138.6 million in cash. This is the output of the four C's operating system at work. The macro tailwinds in deli-prepared continue. Our three-facility network is humming. Our balance sheet is built for accretive M&A, and our team is executing with real conviction. The course we have charted towards national deli leadership is set, and our commitment to that destination is unwavering. As always, we appreciate our shareholders' continued support, and we look forward to updating you on our progress in the quarters ahead. Thank you.
Thank you. This concludes today's conference, and you may disconnect your lines at this time. Thank you all for your participation.
MamaMancini`s Holdings Inc — Shareholder/Analyst Call - Mama's Creations, Inc.
1. Management Discussion
Greetings. Welcome to Mama's Creations, Inc. 2026 Annual Meeting of Stockholders. [Operator Instructions]
I will now turn the conference over to your host, Adam Michaels, CEO and Chair of the company's Board of Directors. Mr. Michaels, you may begin.
Thank you, and good afternoon, ladies and gentlemen. Welcome to our Annual Meeting of Stockholders. It is now 11:30 a.m. and the meeting is called to order and the polls are open. My name is Adam Michaels, Chairman, Chief Executive Officer and member of the Board of Directors, and I will serve as the Chair of this meeting.
Most stockholders have already voted by proxy and the proxies have been tallied. If you are a stockholder of record or a beneficial owner and possession of the legal proxy from your bank, broker or nominee and you want to vote your shares or change your vote before polls close, then you may do so during the meeting by visiting www.mama.vote using your 12-digit voting control number. If you have already voted, it is not necessary to do it again.
Joining me on the call is Anthony Gruber, our Chief Financial Officer. Anthony will serve as the Secretary of this meeting. And Nora Marckwordt from Equity Stock Transfer LLC, has been appointed to act as Inspector for the meeting. We are also joined on the line by Board members, Lynn Blake and Fred Halvin, a representative of UHY LLP, our company's independent registered public accounting firm, is also present on the line.
The Board of Directors has fixed the close of business on May 6, 2026, as the record date for the determination of the stockholders entitled to receive notice of and to vote at this meeting. Equity stock transfer has delivered an affidavit of mailing, attesting that a notice of [indiscernible] availability or a full set of proxy materials are distributed to each holder of the company's common stock as of the close of business on the record date. The affidavit will be attached to the minutes of this meeting.
Mr. Secretary, do we have the preliminary report from the Inspector of Elections?
Yes, we do. There were 40,707,000 shares of common stock issued and outstanding as of the close of business on the record date, and each share is entitled to 1 vote. The preliminary report of the inspector shows that the holders of more than a majority of the outstanding shares are present at this meeting, either virtually or by proxy.
Thank you, Mr. Secretary. With that, a quorum is present for the transaction of business, and the meeting can proceed. The polls for voting on all matters remain open, but will be closing shortly.
We'll now take up the business of the meeting, which consists of 3 proposals. First, the election of 5 directors named in the proxy statement, namely Lynn Blake, Fred Halvin, Meghan Henson, Dean Janeway, and Adam Michaels; myself.
Second, the ratification of the appointment of UHY LLP as the company's independent registered public accounting firm for the fiscal year ending January 31, 2027.
Third, an advisory vote for approval of executive compensation as disclosed in the proxy statement.
[Voting]
The polls are now closed. The Secretary will now report the preliminary voting results.
Based on a preliminary report of the Inspector of Election, each of the 5 directors -- director nominees received the affirmative vote of plurality of the outstanding shares present at this meeting and entitled to vote. Accordingly, each has been elected to serve until the Annual Meeting of Stockholders to be held in 2027 or until the successor is duly elected. [Technical Difficulty]
MamaMancini`s Holdings Inc — Q1 2027 Earnings Call
1. Management Discussion
Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to MAMAS Creation's first quarter fiscal 2027 earnings conference call. For today's presentation, all parties will be in a listen-only mode. Following the presentation, the conference will be open for questions. This conference is being recorded today, June 8th, 2026, and the earnings press release accompanying this conference call was issued after the market closed today. On our call today is Mamas Creations Chairman and CEO, Adam L. Michaels. and CFO Anthony Gruber. Before we get started, I'd like to note that some of the statements on this call will be forward-looking statements that reflect management's current expectations about future operating and financial results.
Although management believes their expectations and assumptions are reasonable, they remain subject to significant risks and uncertainties, and actual results for future periods may differ materially from what is stated or implied during today's call. For more information, please refer to the form of the statement section in today's press release and the risk factors disclosed in the company's most recent form 10-K and any subsequent reports it files with the SEC. Please also note that today's call will include a discussion of adjusted EBITDA, which is a non-GAAP financial measure. Important information, including required disclosures containing a reconciliation to the most directly comparable GAAP measure, It's also detailed in today's press release. At this time, I'd like to turn the call over to Chairman and CEO, Adam L. Michaels. Adam, the floor is yours.
Thank you, Luke, and thank you to everyone for joining us today. I'd like to welcome you to our first quarter fiscal 27 financial results conference call. Fiscal 27 is off to another strong start. We grew revenue 50% to $52.8 million in the first quarter, grew net income 66% to $2.1 million, and expanded adjusted EBITDA 71% to $4.9 million, all while successfully lapping without repeat, a nearly $10 million digital Costco MVM in the prior year first quarter. Growing on top of that comp with meaningfully less trade investment is frankly a remarkable accomplishment. And one that I believe speaks volumes about the durability and breadth of the demand we're seeing across our customer base. The strength of our brand and innovation pipeline. the execution of our integrated three-facility platform.
Beyond the headline numbers, what excites me most is the strategic position we now hold. We entered fiscal 27 as a scaled platform with three facilities, a diversified and growing customer base, a fortified balance sheet, and a clear path towards our long-term vision of becoming the leading national one-stop shop deli solutions provider. The first quarter validated every element of that thesis. Before we dig into the quarter, let me spend a moment on the macro backdrop. One of the earliest lessons I picked up in my career is that catching an existing current is far easier and far cheaper than trying to manufacture one of your own. And in the daily prepared, that current is still building into what I'd call a titeline. Progressive Grocers just released 93rd annual report and the 2026 State of the Industry Survey validates exactly what we are seeing every day at Mama's.
Among grocery retailers surveyed, 79% said that the meat department is the most successful at generating sales, a remarkable 30% said that the percentage point increase from last year. Said differently, in the span of a single year, meat and more broadly protein has gone from a category retailers manage to a category retailers expect to grow with. Seventy-seven percent of retailers further told Progressive Grocer that prepared foods and food service represents a top strategy for merchandising and brand enhancement. underscoring the growth opportunity this year in the fresh perimeter and prepared foods. The very intersection where Mamas competes every day. And 89% said that private label and store brands are our top merchandising strategy, a 16 percentage point increase over last year, reinforcing the relevance of our dual track approach of growing both our branded and private label portfolios. Last month, FMI came out with their annual U.S. Grocery Shopper Trends 2026 and reinforced and put math to this tidal wave we're seeing.
Seventy percent of respondents visit the deli department at least once a month, and one-third visit at least weekly. In our target demographic, 38 percent of Gen Z and 43% of millennials buy deli prepared foods at least weekly. They're more likely to buy deli-prepared foods to save money and to eat healthier, suggesting deli-prepared foods tends to replace dining out more often. Deli prepared departments offer shoppers an opportunity to explore and take a break from their everyday routines. This is what I foresaw nearly four years ago. And why this highly overqualified team we have assembled at MAMA's was willing to plant those early seeds. I can tell you these green shoots have already turned into vibrant saplings.
Layered on top of these survey findings, fresh format grocers continue to capture the largest share of incremental foot traffic, with grocery stores grabbing a growing share of short midday visits from quick serve restaurants as consumers replace restaurant meals with more cost conscious and healthier options. Meat sales remain at record highs, with consumers increasingly viewing high quality meats and poultry as part of a healthy diet. We continue to be in the right place, at the right time, with the right product portfolio. And we now have the platform to capture far more than our fair share. The last three and a half years have brought meaningful progress and laid down a durable base from which to construct a category-leading daily platform. underlying playbook we run against, our four C's framework has not shifted one iota. Starting with our first C, cost, the Bayshore integration continues to be the clearest illustration of the structural margin work Skip and his team are driving. Sourcing and logistics are now run from a single centralized desk covering all three plants.
Bayshore successfully transitioned to Mama's corporate ERP system, providing unparalleled insights across the business. Our production footprint has been reflowed to lift utilization, take out overtime, and pull more absorption through the system. Bayshore Associates have leaned into the MAMA's way of doing things, and we, in turn, are picking up best practices from them. In particular, the premium product know-how they brought with them is already unlocking customer doors that have previously been closed to us. I am so excited to share that we have officially moved into our new East Rutherford expansion, adjacent and literally sharing a wall with our existing facility. While there is more work to do, additional blast freezer and refrigerated storage is currently being installed, allowing for more efficient runs, lower overtime, and better customer service. I am so proud of Shane and the team, from our project managers to line workers who execute our major projects faster than the time before and further below budget.
On gross margin specifically, Q1 reflected some labor and raw material inefficiencies and other startup costs associated with the launch of new packaging technologies and protein form factors that we deployed to support the introduction of over a dozen new items with major retailers in the quarter, the most ever. in a single quarter for mamas. These are investments in our future, and they're exactly the kind of front-loaded costs you would expect to see as we scale our business. Dayshores gross margins continue to improve since acquisition, and we remain on track to bring that facility and the consolidated business in line with our mid-to-high-20s corporate target as these new items move from launch into steady-state production. Moving to controls, our second C. In an industry where food safety sits at the top of every conversation, the discipline our team is demonstrating across all three facilities is nothing short of remarkable and is nothing we take for granted. This quarter saw two successful FDA unannounced audits. And while some companies fear and dread these types of audits, the only thing our team thinks to say is bring it on.
Our team loves these opportunities to show our customers and the entire country what they are used to doing every single day. For me and Skip, the best part is seeing our colleagues across facilities share learnings, highlight best practices, so their sisters and brothers can do even better than they did. If that does not describe a family, I do not know what does. An important milestone underpinning our controls discipline this quarter was the completion of our Enterprise Resource Planning, or ERP, integration across all three of our manufacturing facilities. With Bayshore now fully transitioned onto the same enterprise platform that runs East Rutherford and Farmingdale, we operate as a single, unified system for procurement, production, inventory, and sales. The benefits are already showing up in how we run the business. Faster month-end close, sharper inventory accuracy, more granular, cost visibility by line and by SKU, and a stronger foundation for our analytical tools.
This integrated ERP backbone is a key enabler of the operating leverage you're starting to see come through our financials, an important capability. as we continue to scale towards our $1 billion vision. A huge thank you to John and his IT team, as well as to Tony and his Bayshore team for the long hours, planning, execution, and hypercare you both partnered on to deliver on time and on budget. Thank you. In addition to our ERP system, we've also advanced the implementation and capabilities associated with our WMS, or Warehouse Management System, impacting areas of labor efficiency, stock location, and inventory accuracy. We also successfully introduced and implemented the company's first ever TMS, or Transfer-to-Service. management system, which will be a huge unlock for transportation planning efficiency, improved route and stop optimization, improved OTIF and service visibility, RFP capabilities and carrier compliance, not to mention Rebecca finally retiring her letter-sized dry erase board with the MAPA of the United States. Skip would have me go on and on about the tools and capabilities we have successfully implemented at MAMA's over the past 12 months. But I hope this gives our investors just a taste of the technology we're bringing in well ahead of similarly sized companies, let alone a company in the Delhi prepared space. As our boys Gregory and Alexander would say, we are just built different.
As I have said in the past, cost and controls may earn us a seat at the table, but it is our third C, culture, that keeps us there. With nearly 600 teammates now operating across three facilities, the enterprise-wide shared services model we put in place is producing real, measurable results. As Abby continues to tell me, culture is not a destination, but rather a mindset that always needs love, attention, and reinforcement. Q1 saw the launch of three employee engagement, recognition, and retention programs to do just that. Grandma's Table, our first cross-facility referral and retention program, Mama's Welcome Crew and First Taste, enhanced onboarding and orientation processes with Primo or Buddy assignments for new hires, and the Grandma's Favorite spot recognition program designed to reinforce culture, engagement, and positive employee experience. Yes, I'm The customers we capture, the new items we develop, and margins we enhance are needed for a strong business. can honestly tell you that the P&L is missing our most important ingredient. It is the team we're hiring, nurturing, promoting that is truly the secret sauce of our $1 billion destination.
Our catapult strategy, our fourth and final C, was on full display this quarter. In addition to strong velocity acceleration and high ROI programming, we launched over a dozen new items with major retailers, including new branded SKUs at Walmart, Target, and Food Lion, supported by the startup new packaging technologies and protein form factors. These wins are the direct result of our continued investment in product innovation, our integrated operating platform, and our deepening partnerships with the largest grocers in the country. We expect these placements to ramp meaningfully through the balance of fiscal 27. If I may, let me spend a moment on Costco, which continues to be a marquee example of our catapult strategy in motion. As a reminder, Q1 of last year included our first ever digital MVM at Costco, which alone delivered nearly $10 million in revenue in that single quarter, incorporating meaningful trade investment to successfully drive household penetration and step change velocity acceleration into the future. that exceeded expectations. The important point is that we lapped that $10 million comp on a whole company basis year over year, adjusting out our recent acquisition.
And this was without any incremental Costco programming. In other words, this is not a story of Costco growing on top of itself. This is the entire enterprise stepping up on top of last year's higher promotional base. To me, that is one of the strongest signals you could ask for. It tells us that the Costco is growing. Costco business itself has become structural rather than promotional. The The everyday item status we secured in the Northeast late last year is delivering exactly the steady state, planable volume we expected.
At the same time, the rest of the business has grown into a much larger and more diversified contributor. Oh, and I forgot to mention that Chris just shared with me that earlier last week, we were told that the San Diego region of Costco, actually the last holdout to ever offer us a rotation back in 2024, has decided to take our beef meatballs on as an everyday item. The second region to confirm our everyday status. Maybe Anna. Mancini really was onto something 105 years ago when she made her way to Ellis Island with her now famous meatballs and sauce recipe. We continue to make progress against our goal this year of adding at least two new SKUs to each of our top 10 customers. In addition to Walmart, Target, and Food Lion, we saw successful new launches across three Albertsons divisions, two new panini items at Weiss, two non-protein items at Fresh Market, as well as a number of new wins in the convenience and meal kit channel. I am so proud of Chris and his entire team, not just for the individual wins, but rather how they prove out quarter over quarter that our one-stop shop strategy isn't just theory, but an intentional roadmap for our success for years to come.
A key driver of our catapult success continues to be our commitment to quality. Our NAE, No Antibiotics Ever, Chicken initiative continues to resonate with today's consumers. And we're leveraging the Bayshore acquisition to cross out capabilities and new products into both our legacy accounts and our Crown One customers. customer base. Lauren and her marketing team are also delivering in a meaningful way. Our investment in marketing and retail media continued to compound in Q1. We delivered strong returns across our top retailers while continuing to bring new customers into the brand. On Instacart, our Northeast everyday and rotational businesses carry the momentum forward.
We grew total platform sales to over a million dollars with units up 34% delivering a 5.6x return on ad spend and 45% of our sponsored sales came from new customers. At Walmart, our branded launches went live in April, and early platform results are strong. In the quarter, attributed sales more than tripled year over year, growing to nearly $1 million, with our ROAS expanding from $10.50 last year to $29.50. and 50 cents, meaning every dollar we spent in Walmart Media returned roughly $30 in retail sales. BJ's was another standout. Attributed sales were up nearly 10x year over year, and our ROAS grew nearly 5x. The team is scaling that program efficiently, and we see meaningful room to continue. Looking ahead, with new items now on shelf across Walmart and Target, and our activation calendar running through the back half of the year, we expect this media retail momentum to continue driving trial, repeat, and branded growth. Looking to the balance of fiscal 27, we're planning to meaningfully increase our branded sales across our retail footprint through the ramp of these new introductions at Walmart and Target, the conversion of legacy private label items to branded, and the continued execution of our strategic goal of adding net plus two SKUs in each of our top 10 accounts.
Our trade and marketing investments are delivering strong returns with digital and in-store programming generating measurable lifts in consumer awareness and retail velocities. Looking forward, the company I see in front of me bears very little resemblance to the one we ran even 12 months ago. We now operate a scaled three-plant manufacturing footprint, serve a broader and still expanding customer roster. on a fortified balance sheet with meaningful firepower for M&A and rely on a team that has demonstrated in practice, not in theory, that it could integrate acquisitions and execute with excellence against the plan. The line of sight to $1 billion in revenue has never been sharper, and I have real conviction in our ability to compound profitable growth well into the future. I'd now like to turn the call over to Anthony Gruber, our Chief Financial Officer, to walk through some key financial details from the first quarter. Anthony?.
Thank you, Adam. Moving to the financial results, revenue for the first quarter of fiscal 27 increased 49.7% to $52.8 million as compared to $35.3 million in the same year-ago quarter. The increase was primarily due to item expansion at existing customers the successful launch of over a dozen new branded items at major retailers, the contribution of the Crown One acquisition, and continued broad-based growth, which the company achieved despite lapping a $10 million digital Costco MVM in the prior year quarter and meaning trade investment in the current quarter. Gross profit increased 35.3% to $12.4 million, or 23.6% of total revenues in the first quarter of fiscal 27, as compared to $9.2 million, or 26.1% of total revenues in the first quarter of fiscal 27. the same year-ago quarter. The first quarter gross margin was impacted by labor and raw material inefficiencies and the startup of new packaging technologies and protein form factors supporting the launch of more than a dozen new items with major retailers, as well as the continued integration of the Bayshore facility. We remain on track towards our mid to high 20% corporate gross margin target as these new items transition into steady state production. Operating expenses totaled $9.8 million in the first quarter of fiscal 27 as compared to $7.6 million in the same year-ago quarter. As a percentage of revenue, operating expenses declined to 18.5% from 21.6% in the prior year quarter. demonstrating the operating leverage in our model as we scale, as well as intentional decisions to move some SG&A marketing investments into gross to net trade to support our new item watches.
The change in absolute dollars was partially due to the Bayshore acquisition, new digital strategies, and enhanced product marketing, new management hires, and further technology upgrades to drive actionable insights faster and deeper into the organization. Net income for the first quarter of fiscal 27 increased 66.3% to $2.1 million, or 5 cents per diluted share, as compared to net income of $1.2 million, or 3 cents per diluted share, in the same year-ago quarter. First quarter net income totaled 3.9% of revenue as compared to 3.5% in the same year-ago quarter. Adjusted EBITDA, a non-GAAP measure, increased 71.2% to $4.9 million for the first quarter of fiscal 27 as compared to $2.8 million in the same year-ago quarter. Cash and cash equivalents as of April 30, 26 totaled $24.4 million as compared to $20 million as of January 31, 26. This increase was primarily driven by improved profitability, strong operating cash flow generation, and ongoing working capital optimization. As of April 30, 26, total debt stood at $5.1 million.
The robust balance sheet, combined with our credit facilities and strong cash flow generation, positions us extremely well to pursue the organic and inorganic growth opportunities that Adam described. This completes my prepared comments. Now, before we begin our question and answer session, I'd like to turn the call back to Adam for some closing remarks. Adam?.
Thank you, Anthony. As I reflect on the first quarter, what stands out most to me is not any single number, but rather the way every part of our nearly 600-person team executed against the playbook. The four Cs, cost, controls, culture, and catapult is no longer aspirational language at MAMAS. operating cadence by which we run the business. Cost discipline showed up in the Bayshore integration, in our centralized procurement and logistics, and in the more balanced production footprint. Controls showed up in the completed three-facility ERP integration, in the expansion of our Power BI analytics, and in the food safety standards our team upholds every single day. Culture showed up in Mama's Pantry, Mama's University, Grandma's Table, First Taste Orientation, and in the Shared Services Backbone, now linking all three sites. and Catapult showed up in the new customers we're partnering with for the first time, new items that bring new flavors, functions, form factors to our end consumers, and to our marketing partners that help us bring Mama's Story to new-to-brand households across this great country. As I turn the page to the balance of fiscal 27, our priorities are consistent. First, we will continue to optimize the integrated three facility network, pulling efficiency, margin, and capacity utilization forward as our recent new item launches move into steady state.
Second, we will press the accelerator on retail distribute Walmart and Target ramps while continuing to deepen our partnerships in the club channel with Costco, Sam's Club, and BJ's. And third, we'll use our strength and balance sheet to selectively pursue accretive acquisitions that bring incremental capabilities, capacity, or customer access into the platform. The $40 billion deli-prepared foods category is large, still expanding, and remains highly fragmented. The consumer trends, fresher formats, higher quality proteins, value-oriented meal solutions continue to break in our direction. Retailers in turn want a partner who could simplify the deli-prepared meal solutions. space, deliver consistently at a national scale, and bring genuine innovation to the case. is precisely the role Mama's Creations is built to play. And our long-term vision of becoming the leading national one-stop shop deli solution provider has never felt more within reach. with our strengthened platform fortified balance sheet and demonstrated track record of execution we are better position than ever to capture this generational opportunity and to compound value for our shareholders over the long term. To our team across all three facilities, thank you for your energy, the ownership, and your relentless execution.
And to our shareholders, thank you for your continued trust in this story. I have never been more convinced that the most exciting chapter of Mama's creation is the one in front of us. With that, operator, let's open the line for questions.
We'll now be conducting a question and answer session. If you'd like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up the handset before pressing the star keys. please, while we poll for questions. Thank you. Our first question is from Brian Holland with DA-Davidson.
2. Question Answer
Thanks, good afternoon. I wanted to start with the contribution from some of the new products in the quarter. I'm curious because I thought maybe some of that was geared towards the end of the quarter. So even qualitatively, can you help understand how meaningful the contribution from those new items across at Walmart and then the new customers, Target, Foodline, et cetera? how they contributed in the quarter. And I guess where I'm going with this is, would the expectation be that revenues would increase sequentially in 2Q versus 1Q? And if not, just any caveats that I'm not thinking about?.
Yes, thanks, Brian. I guess actually, let's call it double hit. So you're absolutely right. So these didn't launch till the middle to end of April. So we had all the costs, right, because we built it all out and we got them there. The cost is all in Q1, but really very little of the revenue was in Q1. So hopefully that gives some direction. Obviously, we expect we're already seeing it in the items. We've been more efficient, right? We're literally, you know, for I'll give you one example, Walmart, the first round of of chicken items that we gave.
They have, we have three new items in Walmart at chicken. The first round actually had two labels on it. That's how we originally did it. We optimized with Walmart. And now if you go into the store, you're seeing one label. We literally cut our label costs, not just the label. Remember, it's the labor, in half. And that's just the first round.
So we're already starting to see lower costs. costs, and obviously the acceleration, the velocities are already increasing substantially. So hopefully that's helpful.
That is helpful. I appreciate the color. You may have answered my second question in that answer, but I'll ask it anyway. I got on the call just a few minutes late. So apologies if you, uh, detailed this in your prepared remarks, but maybe just going back right to that point on the gross margin and seeing all the costs and, um, and not seeing the revenue. I know when you and I spoke at the end of the quarter, you talked about, you know, you know, hey, the first couple of times we run these lines through, we learn a lot, we implement it, and then hopefully we improve. So I guess just confirming that we are now past all of that and we do indeed have evidence that these lines, after the first initial runs of some of the new products, that everything is operating exactly as you would anticipate or close to.
Yes, no, absolutely. And hopefully that very colorful example on the Walmart labels is a real example that helps. But yes, and again, we'll keep getting better and better, right? Skip and I will never be satisfied. But certainly the beginnings of it, another one, we just just got a new items into Shaw's, which is an Albertson's division. And it's this great shredded chicken, it's actually my new go-to lunch. you know, it took forever, right? Is it too shredded? Is it not shredded enough? Is it too, too colorful? Is it not colorful enough? So there was a lot of those iterations. Now that we have it for the next customer, obviously we don't have those startup costs. So, The answer is yes, absolutely. We're seeing it a lot better than we were before.
from the market. We'll leave it there. Congrats, people. It's a great work. Thank you, sir.
Our next question is from Eric Delorier with Craig Hellam Capital Group.
Great. Thank you for taking my questions. Congrats on the impressive broad-based growth and now the second everyday item win in San My first question here is a bit of a follow on to just understanding the sort of startup cost of these initial new products. Could you just expand on kind of what those costs were? So we think of this as basically building inventory that you hadn't yet sold, or was there any new equipment that essentially had low initial capacity utilization? Just kind of... How to think about that more broadly, and then how to think about the overall sort of duration of this low market.
margin ramp period before steady state production? Yes, so I think that it was a combination of a couple things. So we used some new technology, right? We actually used some HPP technology, which helped naturally extend shelf life. That was the first time that we've done stuff like that. So there was a lot of back and forth there. multiple touches. So I'd say a lot of it had to do with labor, right? Us learning how to use this new packaging. I'll give you another colorful example, hopefully, of, So, in the past, so with Food Lion, our chicken is in trays, right? We're used to that. We do that with other things, right? Remember all the meals for one.
This is the first time at Walmart we used sort of a see-through, because our product is beautiful, sort of a vacuum-sealed plastic, shall we call, again. that was new stuff. We had some new machinery. The team had to learn, right? They keep getting more and more efficient. We see the throughputs increasing a lot. I gave you examples of the the labels. So yes, so there's a lot of both the packaging, the technology, the form factors. Like I gave the example of the shredded chicken, that's the first time. This is something that Crown had the technology for, but we haven't used a lot.
So again, the great thing about it is these are more one-time things that obviously Anthony and I have the luxury, we're a month ahead, right, of these numbers and we're already seeing the improvements. So, you know, huge congratulations to Skip and his whole team. The Bayshore folks are leading the charge. Right? So one of the things that I shared with you last quarter is we have this amazing Bayshore facility. It's twice as big as the other facilities with almost half the volume. Guess what that meant? Guess where all the Walmart items are being produced? Guess where all the Food Lion items are being produced? So we're able to improve the absorption in Bayshore. And it's going exactly as we had planned.
It's beautiful.
All right, that's very helpful. Great color. Thank you for that. And then just touching on Bayshore here. So, ERP conversion. version integration now complete. Certainly great to see those are, you know, no, no walk in the park. Is there anything that remains on the integration front for Bayshore? And what kind of capacity does this kind of free up for the senior management team? Is this more, freeing up more time to focus on M&A or, you know, should we sort of be looking for any step up in gross margins or operating leverage. Maybe it's a bit of all the above, but kind of just give us a, you know, status quo on the Bayshore integration and kind of how to think about the implications there. Thank you.
Yes, I mean, that was absolutely the last major step, and kudos to Anthony. Anthony led the charge with John Dillon and his team, and Look, it's scary, right? I've done it at a number of different places, and it's, you know, You don't need me to tell you how dangerous it could be. We crushed it. It was absolutely perfect. Let's keep in mind, I think I shared that this was going to happen mid to end of summer. We actually did this ahead of schedule. And that's a testament to the integration that SCIP is leading in Bayshore. Look, like I said before, I'm never going to stop improving this business, but there is nothing major left to do it at Bayshore.
That was the last major hurdle. As my team knows, I think I'm on the road literally the past two weeks and the next two weeks, some for investor stuff, some for other stuff. And I am a lot more confident now and a lot easier for me to travel because that last hurdle is done. Again, Skip remains the same. the boss and he has told me I'm allowed to leave the office now more. So I feel a lot better that I'm Again, there's always more to do and will be more to do, but that was the last major hurdle at Bayshore with the integration.
Good stuff. Appreciate that, Culler, and congrats again on all the progress. Thank you, Eric.
Our next question is from George Kelly with Rolf Capital Partners.
Hey, everyone. Thanks for taking my questions. question for you on the gross margin kind of inefficiencies related to the startup costs are you able to quantify that maybe it's too hard but.
Is it possible to give any numbers around that? Yes, you know, I think there's two sets of numbers. I think roughly... You know, I'd say there's probably somewhere between almost $500,000 to, I don't think, a million, but in that range from a labor and raw material inefficiency, there's probably half a million dollars of, as Anthony mentioned, we made an intentional decision, and Lauren's still upset with me, but we took about $500,000. half a million dollars out of marketing to put that into trade to support the new launches at Target. Target was a big promo to get things started. Same thing at Food Lion. So actually at Publix also we had, I think I told you guys, we just launched the two new Paninis at Publix. We did programming there. So we definitely took some out of marketing and into trade. You guys see that. Hopefully you noticed, SG&A is a percentage which traditionally is in the 20% range. was in the, I think, 18.5% range. So you think between those two things, that would have put our gross margin, I think, north of 25%.
But those were intentional decisions. As a leadership team, we feel like we made the right decisions to support our new launches and to exceed our customers' expectations. I will tell you that these new customers way faster than I expected are already reaching back out to Chris on what's next already. And that's a testament to the work Chris and his team is doing to be true partners. This is not a transactional business. It is not about, hey, what's the next item we're getting in? It's how do we work collaboratively? How do we become the partner that is high quality, high service? Chris talks about it all the time. It starts, we get in with grandma quality products, and we stay and exceed with grandma quality service. And that's what Chris has been able to show time and time again, that we're now collaborating with new items with some of these customers.
So I think it's an incredibly great and strong ROI.
Okay, okay, thank you. That's helpful. And then, second question for me on Walmart. I know you haven't been on shelf that long there, but can you talk to us just about the performance that you've seen so far and any kind of takeaways? Are you pleased with the velocities, etc.? Just anything on Walmart. Thanks. Thanks.
Yes, very pleasantly surprised. And actually, the word is I'm a little surprised. Of course, Chris said, you know, I told you so, but the products are doing very well. The ramp up, actually, I'm terribly impressed where, again, the chicken items are north of 2,000 stores already. I told you we just launched chicken. 30 days ago, 45 days ago, and we're already north of 2,000 doors with the new chicken items. So I love the ACV, meaning the number of doors we're in. I love every week the lawsuits are going up. So yes, I feel really good with it.
Hopefully you just, you know, I just mentioned earlier the work that Lauren is doing to, you know, chum the water, shall we say. The ROAS at Walmart, I mean, guys, $30. I give a dollar. They give me $30 of retail sales back. That's a pretty good ROI. So I love it. across the board how Skip got the product together, how Chris is able to continue to drive those velocities, how Lauren is helping with the marketing. It's an incredible team effort which is wonderful.
Okay, great. And then last one for me, just on the quarter, was there much impact from you raising pricing at all? And I guess subsequent to the quarter, has there been any kind of pricing?.
And that's all I had. Thank you. As you know, right, because you've been with us from the very beginning, pricing is something we take every day. This is not a once a year type thing. We have the right pricing, and as inflation, unfortunately, moves up for all of us. Chris does a great job partnering with our customers. I think, so I don't think anything I know, obviously, 90% of our sales growth was volume-driven, which is fantastic. amazing and about 10% of it was pricing driven. So the right amount of pricing, of course, I'll always challenge Chris to make sure that Most, if not all of our customers are bigger than we are, so we shouldn't be taking it on the chin.
But what's great is our pricing is at the right place that it's only a conversation of inflation. And I've shared with you guys before the research and the data that we subscribe to that gives us real time. commodity inflation and we're able to share that in partnership with our customers every time.
Thank you. Thanks, George. Our next question is from Ryan Myers with Lake Street Cash.
Hey, guys, thanks for taking my questions. First one for me, and it might seem like this is a given, just given all the momentum you're seeing across the business with the new retailers and the new products, but Adam, do you still feel comfortable with the double-digit organic growth for the year?.
Yes, no, absolutely. Again, Chris and his team continue to not just deliver, over deliver for us. It's wonderful, and you and I have spoken about it, and I've spoken about it with our fellow investors. Yes, it is pretty awesome. You know, we're sort of everywhere, but equally we're nowhere, right? Chris is still staying true to his, you know, two items in each of our top 10 customers. He's done a great job already. Actually, I tell him he's not pacing himself well because he's ahead of plan. Between the seven new items at Walmart, the five new items at Food Lion, two new items at Fresh Market, two new items at Albertson, I could go on. The new item at Target with the additional second item coming in next month.
August so yes no I feel good with our growth continued growth and yes no absolutely.
Got it. No. That's good to hear. And then just kind of circling back on your comments on the marketing dollars that were in GNA coming out shifting into trade promotion. How should we think about that mix going forward? Was the numbers you posted in Q1 just a one-time thing? As you mentioned, it's below 20% of sales. So just kind of want to get a feel for that for the rest of this year.
No, I think I would, you know, I think I hope, I hope our fellow investors see, you know, I tell you guys, Anthony and I have our hands on the wheel at all times. We knew that we were investing in these new item launches and this new innovation, and we knew that margin would be somewhat impacted by that. And that's why, again, Our leadership team does everything together as a team. Therefore, we knew that we wanted to pull back other places to reinvest. But, you know, I think we'd say, you know, I'd like to stay true to that 20%. We continue to be investing in new technologies, new teammates. You know, we're doing, I'll actually mention, unfortunately, I'm not able to be at IDDBA today.
So if you guys remember IDDBA, the International Dairy, Deli, and Bakery Association, this is our Super Bowl. And obviously I wanna hang with you guys more than my fellow teammates, so I'm pretty upset. But Chris and Lauren are out there with our teams, doing an amazing job. Again, they're meeting with all the top customers, highlighting a bunch of new items. You guys saw, I think last week, Lauren sent out a press release on all the new items that we're launching. And I feel really bullish on what we're doing. But Anthony, and I, our hands are on the wheel.
When we know we're doing well, we'll lean into trade and marketing. If we know that we're investing elsewhere, we'll be able to pull it back. And that's what you saw in Q1. But I wouldn't say, I'd say, go back to our steady state for Q2 and onwards. Okay, got it. No, that's helpful commentary. Thank you.
Our next question is from Anthony Vendetti with the Maximum.
Thanks. Just a follow-on to the Bayshore facility. Adam, you mentioned that with the extra capacity being able to supply Walmart and Food Lion, how much capacity is left after supplying Walmart and Food Lion in the Bayshore facility And then if and when that capacity gets filled and maybe the timeline for when you're expecting that to happen, does that necessitate? either another facility or an acquisition.
in the near term. Yes, so what's really wonderful, and this is why the crown acquisition was so amazing, It was a huge unlock for us from a capacity standpoint. I would still say, as strong as Chris works hard to try to stress us out, we should be able to double our business. What we've said is we could double our revenue if we're at roughly $200 million. today we could be 400 million with this new space. The other thing as a reminder, I think I just mentioned earlier, we just opened up, we just almost doubled our space in East Rutherford facility also. So we had a lot of foresight into what we were doing in East Rutherford with the Bayshore acquisition that I think we're good for the next couple of years. Now, that said, it doesn't slow me down one bit on what's the next acquisition. I still believe that it will include, I'm looking for companies with their own manufacturing and distribution.
That means that I will get additional, uh, capacity. Um, But the great news, unlike a year ago, before the Crown deal happened, We feel really good. There's definitely a lot more opportunity for us capacity-wise.
Okay, and then just one quick follow-up. Any insight on the new packaging technologies and protein form factors that you have planned?.
I think that we'll continue to try to be true partners with our customers. You know, the biggest things that we continue to hear is, one, I just don't have the labor anymore. And we're listening to that, and you see the examples of, like, Publix, that we transitioned our bulk and kit items into our meals for one items. That was an investment on our part. You know, I don't know. It was cool. a year ago, less, that added this new mapping technology, which stands for modified atmospheric pressure. What it does is it pushes nitrogen in, pushes oxygen out, and almost doubled our shelf life on our products. So labor is important, shelf life is a second one, so I spoke about the mapping just now.
HPP technology that we're using at Walmart is another example that extends shelf life naturally. So, these are the conversations that Chris and team have with our customers and that's what we try to be responsive to. So I hope to continue that. Again, so we can continue to be great partners. Okay, thanks very much. Appreciate all the color.
Thanks, Anthony. Thank you. There are no further questions at this time. I'd like to hand the floor back over to Adam Michaels for any closing remarks.
Thank you, Operator, and thank you again to each of you for joining us today. To close, the first quarter of fiscal 27 was, in my view, the clearest evidence yet that the platform we have spent the last three and a half years building is working exactly as designed. The flawless transition of our now enterprise-wide ERP system to ensure that what gets measured gets improved, lapping a $10 million digital Costco MVM effortlessly and still delivering revenue growth, adjusting out acquisitions, launching more than a dozen new items with major retailers, expanding adjusted EBITDA 71%, and ending the quarter with $24.4 million in cash. all in a single 90-day window. It is not a coincidence. It is the output of the 4Cs operating system at work. Macro Tailwind and Deli Prepared continues to outpace Total Food and Beverage. Our three-facility network is humming, our balance sheet is positioned for accretive M&A, and our team is executing with real conviction. The course we have charted towards national Delhi leadership is set, and our commitment to that destination is unwavering.
As always, we appreciate our shareholders' continued support and look forward to updating you on our progress in the quarters ahead. Thank you.
This concludes today's conference. You may disconnect your lines at this time. Thank you again for your participation.
[Call has ended.]
MamaMancini`s Holdings Inc — Q4 2026 Earnings Call
1. Management Discussion
Greetings, and welcome to the Mama's Creations' Fourth Quarter Fiscal 2026 Earnings Conference Call. [Operator Instructions]
It is now my pleasure to introduce your host, Luke Zimmerman of Investor Relations with Mama's Creations. Thank you, and you may begin.
Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to Mama's Creations Fourth Quarter and Fiscal Year 2026 Earnings Conference Call. During today's presentation, all parties will be in a listen-only mode. Following the presentation, the conference will be open for questions. This conference is being recorded today, April 14, 2026, and the earnings press release accompanying this conference call was issued after the market closed today.
On our call today is Mama's Creations' Chairman and CEO, Adam O' Michaels; and CFO, Anthony Gruber.
Before we get started, I'd like to note that some of the statements on this call will be forward-looking statements that reflect management's current expectations about future operating and financial results. Although management believes their expectations and assumptions are reasonable, they remain subject to significant risks and uncertainties. Actual results for future periods may differ materially from what is stated or implied during today's call. For more information, please refer to the forward-looking statements section in today's press release and the risk factors disclosed in the company's most recent Form 10-K and any subsequent reports that files with the SEC.
Please also note that today's call will include a discussion of adjusted EBITDA, which is a non-GAAP financial measure. Important information, including required disclosures containing a reconciliation to the most directly comparable GAAP measure, is also detailed in today's press release.
At this time, I'd like to turn the call over to Chairman and CEO, Adam O'Michaels. Adam, the floor is yours.
Thank you, Luke, and thank you to everyone for joining us today. I'd like to welcome you to our fourth quarter and fiscal year '26 financial results conference call. Fiscal '26 was, without question, the most transformational year in the history of Mama's Creations. We grew revenue 39% to $171.7 million, expanded adjusted EBITDA over 50% to $15.4 million, completed a transformative acquisition that nearly doubled our manufacturing footprint and capped the year with a record fourth quarter that saw revenue grow 61% to $54 million. But what excites me most is not the numbers. It is the foundation we have built, the team we've assembled and the strategic position we now hold.
This organization entered fiscal '26 as a high-growth deli-prepared foods company with ambition. We exit fiscal '26 as a scaled platform with the capabilities, capital and conviction to become the leading one-stop shop deli solution in the country.
As always, let us start with the macro trends. I learned early in my career that it is much easier and cheaper to ride a wave versus creating your own and the deli prepared space is a Tsunami. On the consumer front, the generational shift towards deli prepared foods continues to accelerate. Fresh format grocers saw the largest bump in food traffic in 2025 with double-digit year-over-year increases.
Grocery stores are also capturing a growing share of short mid-day visits from quick service restaurants as consumers replace restaurant meals with more cost conscious and healthier options. For the supermarket news, retailer expectation survey, 55% of retail respondents said deli and foodservice is the category they expect to have the most success with in 2026. And 2/3 of retailers plan to introduce more grab-and-go or prepackaged prepared foods this year.
Meanwhile, meat sales hit a record high of $112 billion in 2025, with 77% of shoppers agreeing that meat and poultry are part of a healthy diet, up more than 20% since 2020. We continue to be in the right place at the right time with the right product portfolio. Now we have the platform to capture far more than our fair share.
While we have made substantial progress over the past 3.5 years and built a rock-solid foundation from which to build a market-leading platform in the deli category, our fundamental 4C strategy has not changed. Cost remains our first C and the Bay Shore integration personifies the work Skip and his team are doing to deliver quarterly improvements in our gross margins.
The integration of Crown 1 Bay Shore facility has exceeded our expectations. What started as a 42,000 square foot acquisition with room for improvement last summer, has become a well-integrated third pillar of our manufacturing network. Procurement and logistics are 100% centralized. Production has been rebalanced across all 3 facilities to optimize capacity, reduce overtime and improve absorption.
The team at Bay Shore has embraced the Mama's culture. Mama's has learned from the Bay Shore team, and their premium product capabilities are opening doors to customers we could not previously access. And the results speak for themselves. Bay Shore's gross margin has improved meaningfully since the acquisition and we remain on track to bring that facility in line with our mid- to high 20s gross margin corporate target. The cross-selling opportunity between our legacy customer base and Crown 1's premium accounts, is just beginning to materialize, and we expect this to be a meaningful growth driver in the coming fiscal year. But Bay Shore is not our only location that is shedding costs and strengthening capabilities. As you see in our Q4 numbers, our favorable chicken costing in Farmingdale, coupled with fixed asset absorption in our Costco rotation in East Rutherford improved our gross margins and delivered superior bottom line results.
Controls is our second C. And while my wife taught me that I should not have favorites, this C is a little dear to my heart because without controls, we can't have the other Cs. And I could tell you that Q4 did not disappoint. With food safety top of mind in our industry, I am proud to report that not 1, not 2, but all 3 of our facilities achieved a third-party SQF score of 98 recently or excellent, the highest results category. What makes this even more impressive is that 2 of the 3 audits this year were unannounced, meaning while you might wake up on a particular day to a fresh cup of coffee, Mario, Julia and Eric woke up to a third-party inspector for a 2-day acquisition, and all 3 blew it out of the water. Congratulations to the entire team who show us every day what Mama's quality really means.
I'm also excited to share that we continue to add more analytical capabilities for our teams because what gets measured gets improved. Q4 saw the introduction of our Power BI platform as well as further expansion of our planning and procurement capabilities. Thank you, John, for leading our technology infrastructure; and Alberta for guiding our forecasting capabilities. Controls is not a tagline or a word on a page at Mama's. It's how we run our business every day to ensure we execute with excellence.
If Costs and Controls get us to the party, it is our third C, culture, that keeps us there. The Bay Shore acquisition brought tremendous management talent to our Mama's family and allowed us to build our first ever enterprise-wide shared services model. In January, Abby led the design, communication and rollout of a new model for Mama's, increasing responsibilities for leaders, recognizing standouts with new promotions across all 3 sites and driving an overall empowerment culture, solidifying our 1 plant 3 locations mantra.
To improve communications and culture, we implemented a new employee one-stop shop portal to share messages across the organization and build community for our nearly 600 associates. Last month, Mama's Pantry, our first intranet site open for business, reinforcing our physical community with a digital extension available 24/7/365. We are even more excited to share next quarter the work we've been doing around learning and development at Mama's University. As my mother, who is a teacher for over 25 years in the public school system, taught me, you are truly never too old to go back to school.
Our Catapult strategy, our fourth and final C, delivered extraordinarily strong results this quarter and throughout fiscal '26.
Let me speak to the Costco journey, which exemplifies our progress. Just 3 years ago, we had approximately $0.5 million in Costco sales limited to one product in one region. By fiscal '25, thanks to Scott and the team, we have grown that to $10 million in annualized sales, with active promotions across multiple regions of the country. In Q1 of fiscal '26, we launched our first digital MVM, which essentially matched all of the fiscal '25 full year Costco business in a single quarter. We continued ramping throughout the year with strong rotations across multiple items culminating in Q4 with our first ever national print MVM, a true milestone that set the tone for the types of volumes we can achieve. This was the trophy achievement for volume movement at Costco.
Based on this success, capturing new customers and accelerating item velocities, earlier this year, we were informed that we achieved everyday item status in the Northeast, the very region where our Costco journey began. This is a landmark milestone that positions us for steady state, repeatable and plannable business. And we expect our everyday success in the Northeast will lead to even more rotations, and new item introductions across all 8 of Costco's regions.
Our operations team executed flawlessly throughout this growth, delivering on meaningful quarterly builds without a hitch which solidifies tremendous trust with our retail partners. Beyond Costco, Chris and his team are ensuring our Catapult strategy is delivering across the entire retail landscape. At Walmart, we added another item in Q4 following the breakout success of our 4 count chicken item and are launching 7 new SKUs in up to 2,000 stores, all branded, which represents exceptional penetration.
At Target, we're approved for 2 branded SKUs, one already on shelf, launching in 750 stores, with plans to ramp up to approximately 2,000 stores. And a Food Lion, we've already expanded to roughly 1,200 stores across the Southeast and Mid-Atlantic with 5 branded SKUs. These placements represent a significant validation of our product innovation, quality and operational excellence.
We are growing at 5x the category growth rate, a category that has recently been growing units ahead of dollars which is rare in food and reflects strong consumer demand and trials.
A key driver of our Catapult success is our commitment to quality. Our NAE, no antibiotics ever chicken initiative is a significant quality differentiator that resonates with today's consumers. We're also leveraging our Bay Shore acquisition to cross-sell capabilities and new products into both our legacy accounts and our Crown 1 customer base.
Another Catapult strength in Q4 was the work Lauren and her team are doing on the marketing front, which accelerated velocities and introduced new customers to Mama's.
Our Instacart programming made Costco's MVM the most successful campaign in Mama's history, an unheard of 65% of consumers were new to brand, which creates a flywheel effect that turns trial into repeat. December, the peak of our Costco MVM saw our best month ever on Instacart. And the partnership, Lauren and Chris built made Mama's the #1 meat ball on Instacart for all of Q4. The team's work delivered continued double-digit ROAs with Walmart. And Q4 saw new effective brand partnerships and collaborations with Brooklyn Bread and Mike's Hot Honey, all with the intention of driving trial, awareness and deepening relationships with our consumers.
This commitment to quality and visibility is being recognized, most recently in Progressive Grocer's 2026 Editors Picks list for the best new products where our cheese stuffed chicken meatballs received worthy recognition. Looking to fiscal '27, we're planning to meaningfully increase our branded sales across our retail footprint, through new introductions like at Walmart and Target, and by transitioning legacy private label items to branded like at BJ's and Publix. We have set a strategic goal of adding net plus 2 SKUs or items in each of our top 10 accounts.
Our trade and marketing investments are delivering strong returns, with digital and in-store programming generating measurable lifts in consumer awareness and retail velocities.
As I look to fiscal '27, I see a business that is fundamentally different from where we were even 12 months ago. We have a scaled manufacturing network, a diversified and growing customer base, a strengthened balance sheet with significant M&A capacity and a team that has proven it could integrate with excellence.
Our path towards $1 billion in revenue is clearer than ever, and I am confident in our ability to deliver sustained, profitable growth for years to come.
I'd now like to turn the call over to Anthony Gruber, our Chief Financial Officer, to walk through some key financial details for the fourth quarter and fiscal '26. Anthony?
Thank you, Adam. Moving to the financial results, revenue for the fourth quarter of fiscal '26 increased 60.7% to $54 million as compared to $33.6 million in the same year ago quarter. Revenue for fiscal year '26 increased 39.2% to $171.7 million as compared to $123.3 million in the prior year. The increase was primarily due to item expansion at existing customers, successful high ROI promotional activities that accelerated velocities, initial placements at new customers and the acquisition of Crown 1.
Gross profit increased 53.8% to $14 million or 25.9% of total revenues in the fourth quarter of fiscal '26 as compared to $9.1 million or 27% of total revenues in the same year ago quarter. Gross profit increased 41% to $43 million or 25.1% of total revenues in fiscal '26 as compared to $30.5 million or 24.8% of total revenues in the prior year.
The fourth quarter gross margin was impacted by the continued ramp of the Crown 1 facility. While the improvement in full year gross margin reflects the operational efficiencies, procurement optimization and stabilized commodity costs across the platform. Operating expenses totaled $10.9 million in the fourth quarter of fiscal '26 as compared to $7.2 million in the same year ago quarter. As a percentage of revenue, operating expenses declined to 20.2% from 21.4% in the prior year quarter.
For the full year, operating expenses totaled $35.9 million as compared to $25.7 million in the prior year. As a percentage of revenue, operating expenses were 20.9% in fiscal '26 and as compared to 20.8% in the prior year. The change was partially due to the Bay Shore acquisition, new digital strategies and enhanced product marketing. New management hires and further technology upgrades to drive actionable insights faster and deeper into the organization.
Net income for the fourth quarter of fiscal '26 increased 37.5% to $2.2 million or $0.05 per diluted share as compared to net income of $1.6 million or $0.04 per diluted share in the same year ago quarter.
Net income for fiscal '26 increased 43.2% to $5.3 million or $0.13 per diluted share as compared to net income of $3.7 million or $0.09 per diluted share in the prior year. Fourth quarter net income totaled 4.1% of revenue as compared to 4.8% in the same year ago quarter. Adjusted EBITDA, a non-GAAP measure, increased 77.4% to $5.5 million for the fourth quarter of fiscal '26 as compared to $3.1 million in the same year ago quarter.
Adjusted EBITDA increased 52.5% to $15.4 million in fiscal '26 as compared to $10.1 million in the prior year. Cash and cash equivalents as of January 31, '26, totaled $20 million as compared to $7.2 million as of January 31, '25. The significant increase was primarily driven by improved profitability, strong operating cash flow generation and ongoing working capital optimization.
As of January 31, '26, total debt stood at $5.4 million. The robust balance sheet, combined with our credit facilities and strong cash flow generation positions us extremely well to pursue the organic and inorganic growth opportunities that Adam described.
This completes my prepared comments. Now before we begin our question-and-answer session, I'd like to turn the call back to Adam for some closing remarks. Adam?
Thank you, Anthony. As I reflect on fiscal '26, I'm incredibly proud of what our team of nearly 600 associates across all 3 facilities has accomplished. We have taken every step deliberately and strategically, guided by our 4 Cs framework, cost, controls, culture and Catapult. From strengthening our cost structures and controls in the early days to building a world-class culture founded on operational excellence and continuous improvements to now catapulting this company towards its next phase of growth through our disciplined financial management and strengthened balance sheet, we have built a platform for sustained success.
Looking ahead to fiscal '27, our strategic priorities are clear and focused. First, we'll continue to optimize our integrated 3 facility network, maximizing efficiency, driving margin expansion and increasing capacity utilization. Our operations team have shown they can scale flawlessly. And this is our core competitive advantage, we will continue to leverage.
Second, we will deepen and expand our retail distribution through the aggressive ramp of our major new wins at Target, Food Lion and Walmart while simultaneously expanding our club channel partnerships with Costco, Sam's Club and BJ's.
Third, we will deploy our strong financial position and balance sheet to pursue accretive acquisitions that add capacity, capabilities, categories and customer access to our platform. The $40 billion deli prepared foods market is large, growing and fragmented, consumer preferences are moving decisively in our direction. Retailers need partners who could simplify their deli operations and deliver quality, variety and reliability at a national scale that is exactly what Mama's Creations does. And our vision is to become the leading national one-stop shop deli solutions provider.
With our strengthened platform balance sheet and track record of execution, we are better positioned than ever to capture this generational opportunity and deliver sustained value for our shareholders.
I want to thank our team for their extraordinary dedication and execution. And to our shareholders, thank you for your continued support and confidence. The best is truly yet to come.
With that, operator, let's open the line for questions.
[Operator Instructions] And our first question comes from the line of Brian Holland with D.A. Davidson.
2. Question Answer
Maybe the boring stuff first. Looking ahead to fiscal '27, can I assume that the double-digit growth outlook...
Yes. Thanks, Brian. Yes, look, I'm proud of the team. The team is just getting started. Hopefully, you're seeing like I am opening new doors. You're seeing getting more average items carried into each of those doors. And the work that Lauren and team are doing on the marketing continues to accelerate the velocity. So yes, I feel -- we feel comfortable that double-digit growth will continue to gain meaningful share for the year ahead, absolutely.
Looking on that. Obviously, as you get bigger and you amass these bigger wins, you create tough compares for yourself -- with Costco. So just as we think about modeling sensitivities here, would any of these quarters in 2027 potentially be less than double digits just because of what you have to lap, obviously, I'm thinking specifically about Q1 or Q4?
Where is the love, Brian, come on? Where is that positive mental attitude that I'm looking for? Look, Chris is doing a job. The entire sales team is doing a job. And like I've shared with many of you, we have these lapping charts. Chris absolutely understands that there are some there was programming last year that we have to replicate and accelerate. So I will continue to tell you that, first of all, we will continue to gain meaningful share, right? The category is growing in the mid-single digits right now. I think that we could continue to grow that. And yes, it's on Chris and team, and it's on Skip and operations to keep up with Chris, to ensure that when we see programming ahead from last year, we have to, again, meet that and accelerate it. So I'm going to keep to our double-digit growth aspiration.
On M&A, I believe Skip has final say on when you could pull the turn around the next acquisition. I think that's tied to Crown 1. What's the latest there as far as M&A readiness?
Yes. No, I am super proud of the Bay Shore team, Andy and Roger, Tony, Everybody, Mario. We're ahead of the plan. Obviously, there's still more to do. We are not fully integrated, right? There -- we have to get the technology in, but I feel like we're in good shape. You know me, if I'm not on the road with you guys. I am on the road visiting other facilities, which I have been doing in the past month. I think we're in good shape. Look, let me repeat, this is really important. We want to do acquisitions. We don't need to do acquisitions. The internal team is doing an awesome job. There is so much to invest in to accelerate growth. But with the team doing such a good job here, means I don't got much to do. And allows me to go out and look at other opportunities. And if we could find something that is accretive to our business, both in the sense of getting new customers, getting new capacity, accretive in the sense that while it might be dilutive in the gross margin space because we're good at improving things. We're not looking for a turnaround. So they have to -- it has to be accretive to our EPS. And if we find something great at the right price and Skip tells me he's ready, then we're ready to go.
Last one for me. Start to the more that I say this category, you referenced to a $40 billion category. I'm surprised by how immature it is, right? And kind of interesting, I think your success sort of proves that out, the merits of having a branded presence in this category, which historically didn't have. So as we think about all these wins that you're attacked, it's great to tack on the wins and more stores and more items per store. And sort of like the next wave after that is kind of category adviser to some of these retailers. And it seems crazy for me to think a company with less than $200 million could take on a role such as that. But I'm just wondering how your success is manifesting as far as relationship building with these types of large retailers who might be looking at your success and asking you to help them think about the inventory because that's really kind of the last action I think retail customer connectivity and relationship solidification, I'll stop there.
Yes. No. I think I agree with what you're saying. Obviously, the deli category is not as mature as center aisle. The category captains is not as clear. But look, I will tell you the amount of time that our sales team is on the road, not selling per se, but a major customer -- the biggest grocers and retailers in the country are calling us to say, "Hey, and look for you guys just to come and speak to my leadership team, and tell them what you're seeing in the category," I think that's pretty amazing. And what happens is great quality, great service. And when a customer wants a new item, the first call is they're giving us a call. And that's what I think -- I talk about this flywheel effect, that's what continues to accelerate our growth more and more. So I love what the Chris and the sales team are doing to be that category adviser. And that doesn't mean we're going to have $1 billion of sales tomorrow. However, it makes it much more likely that we're going to have that $1 billion of sales a couple of years from now, and that's what we're building towards. We are in this for the long game without a doubt.
Our next question comes from the line of Eric Des Lauriers with Craig-Hallum.
Congrats on another strong quarter and a really exceptional year here. My first question, I noticed a big step-up in trade promotion spend in Q4. It's great to see. I know it's been sort of an area of focus. You commented on the all the success you had on Instacart, around the Costco, MVM. And I'm just wondering how much we should sort of attribute that nice step up in Q4, kind of specifically to that Instacart, Costco commentary? And how much of it was kind of more broad-based a result of your improved profitability and cash flow? I guess, ultimately wondering, is this sort of a seasonal kind of onetime Costco MVM thing? Or does this represent a bit of a step-up or a new normal going forward?
Yes. Thanks, Eric. And again, the credit goes to the team. Everyone is just doing an incredible job. Actually, I love -- I'm glad you called that out. It's pretty amazing. So if we're at a -- what we had a 26% gross margin with nearly 10 points of trade. I'll let you guys do the math yourself, you know how that works with gross to net. That puts into perspective what the true gross margin could have been if we're not investing in the future. One thing that I've been looking at is overall just the amount of investments that we've been making between more marketing, right? I think we're up like 70% on marketing for the year, literally a crazy amount of what do we like 4x trade. This is huge -- even stuff like -- I know you can't add the 2 numbers together, but depreciation, right, because we're investing in equipment and everything. It is amazing what we've accomplished from a profitability standpoint while making these massive investments. I'm super proud of the team. Directly to your point, you've heard me say before, we will continue to invest the trade as long as our gross margins are in the mid- to high 20s. And you saw us being in the mid- to high 20s this time around, we're able to substantially invest in our trade.
What do we get for that trade? Crazy success at Costco already got an everyday item in the Northeast. So clearly, the ROI is there. Also, to your point, we look at it every quarter, right? Peter, Chris, myself, Anthony, we look at trade every single day. And if we have the gross margin, we'll lean into the trade. And equally, the good news is trade isn't set quarters ahead, even months ahead necessarily. If things are getting softer, meaning we know chicken is accelerating now. Obviously, freight is a bit more of a challenge now. That means that we have to pull it back. So again, we look at it week-to-week, month-to-month to decide what the right trade rate is for the quarter.
Very helpful. I appreciate that color. And then just a follow-up for me. You mentioned some new technologies you're bringing into Bay Shore. Could you just kind of remind us, overall, how to think about CapEx for 2027? What kind of equipment technologies are you guys looking at? And how to think about dollar amounts and timing here as we update our models?
Yes. I mean this is where Anthony is so helpful to us, right? So you know our rule, right? You don't get to spend CapEx if you're not making it from cash flow from operations. We spend -- the plan is to spend mid- to high single-digit millions of dollars a year. Again, only if we have the cash flow from operations. We are very structured in that manner. But yes, there's always more equipment. We're doing exceptionally well now with these -- remember, I spoke to you guys about this map technology that extends shelf life naturally. We just bought two more of those. But again, we're talking about hundreds of thousands of dollars -- a couple of hundred thousand dollar pieces of machinery -- this is not like the grills, if you remember, a year or 2 back, where the grills are $1.5 million each. So these are still -- these are smaller things. Again, we want to keep investing. Eric, you've toward our plants before. You know that I love buying more stuff that reduces complexity, that accelerates things, that reduces the need for the manual labor that I can now put the people in other places. So the more I can do that obviously, the happier I am, happier Anthony is and obviously, that's going to improve our gross margins.
Our next question comes from the line of George Kelly with ROTH Capital Partners.
First from me is on input pricing just around chicken and beef. Wondering if you can update us just on what you've seen recently? And I think especially beef continues to be pressured, Adam, I think you just mentioned that chicken has been a little pressured here recently, too. Wondering how you're planning to kind of adjust pricing or what you're planning to do to respond to what you're seeing?
Yes. Thanks, George. You guys definitely get your money's worth out of us in the sense that there is no adult day. As you mentioned, beef -- it's funny beef. I'm a little happier about because beef has gone up, as you guys have all seen and it's in the paper. But it's been relatively stable. Now relatively stable high. But still, I'm all about stability. Chris and team have done a great job. Again, we're very transparent with our partners, our retail partners. The goal is not for us to get more margin, but we can't lose money because then we can't help you for out of business. So we have been successful in getting the price increases in to maintain our margins. There is some delay a little bit can be anywhere from 30 days to 60 days. But beef I do like the stability, but I'm telling you I don't think it's going to go down and Alberto is the boss here. I don't think it's going to go down anytime soon, certainly not before the end of summer. But again, we have the pricing, we're still working on more pricing, and I think we're in good shape there.
Chicken, again, I'll always find a positive chicken just a bell curve, right? Chicken always goes up around this time of year. It has gone up. We were very lucky that Q4 tended to be a little bit lower. The great news about this is we're contracted, right, for close to 70% of our chicken sales. Now that doesn't mean we're immune to it, right? There's also the 30%. There's also some things we have that are -- have a floor and ceiling, so it moves up. But again, the sales team has done a great job at looking -- we're so much more proactive now. We actually show -- I've told you guys about best money we spent. It's a forecasting system that's all over the -- it's a global forecasting system on commodities. You could see what's going to happen. They're pretty accurate, and we share that with retailers in advance. And the answer is, "Hey, guys, we think it's going to go up. I'm putting my price increase in now. And if it doesn't go up, I'm happy to pull it back." I'd be remiss, though, pricing is just one piece of it, right? Skip and his team are doing an incredible job. Again, trimming is a big lever. We have to do more of that. We have to sell more of the bottoms. But there's work that Alberto and procurement are doing to. And I look at this positively, there's still so much more for us to do, right? We've been in Bay Shore, 7 months. So there continues to be efficiencies from a procurement perspective. From a process perspective, I mentioned earlier that 1 plant, 3 locations. You've heard me say that before, we're moving stuff around all the time, and we had excess capacity in Bay Shore, so that's great. That means we got to do the Walmart -- the new Walmart stuff there, the new Food Lion stuff there. So with Skip helping us by lowering our costs with Chris helping us by raising our prices. Again, I certainly can't sit back with my hands up, but -- we are very intentional and very proactive in everything that's happening with beef, with chicken. Obviously, you guys know about what's going on in freight a little pressure on freight. So we're way ahead of it. Freight is another good example where we're increasing our MOQs, minimum order quantities, right? So maybe we don't get all of the pricing we need passed on freight. But if I could make the process more efficient, if I get more in the truck, I guess what happens, my costs go down, and then I could offset that increase. So all these things we're thinking of well ahead of them actually happening.
Okay. Okay. That's helpful. And then second question for me is on Crown. So I believe you were -- with respect to the legacy product portfolio there and some of the legacy customer base, you were managing that, potentially taking pricing, potentially sort of exiting some of their less productive SKUs. And that was a process that was maybe starting a few months ago, early this calendar year, I think. Just curious how that's gone. And when we think about the sequential growth at Crown, should we anticipate that sequential revenue number to perhaps dip a little bit before stabilizing and growing? Or like now that you've had it longer, how should we think about the sequential build on Crown's revenue?
Yes. Look, we're right on track. I think I told everybody that just like we did in Creative Salads and like we did with Ala branch, the first year of Bay Shore is about getting the economics right, and that means getting price increases, changing up the products to improve the margins. There might -- we might have to exit some items, and we're doing just that. The expectation, again, and I believe I've shared pretty consistently is my hope is that Crown is actually flat for the year, right? We're going to lose some stuff, but then add some stuff. And if we can be flat for the year on Crown, that would be a great success because our gross margin is going to be significantly higher on that flat growth. I think it's amazing. Again, what Chris is doing right, we have one sales team. It doesn't matter what facility it's being produced out of. Chris and his team have had great partnerships with our new customers that we're really excited about. Actually, I haven't even shared yet, but I guess I can share now, like we're -- we actually have gotten wins already using our Bay Shore facilities and equipment. We have the shredded chicken which is awesome, which is a big Bay Shore item. We actually sold that into one of our -- the legacy Mama's Albertsons accounts and Shaws. We're able to -- I mean, the team is amazing. The team's already sold some of our cheese stuff chicken meat balls, a legacy Mama's products into a Bay Shore customer with Wakefern. So -- no, I love what the team is doing. And -- as bullish, if not more bullish than I was -- oh my goodness, I don't know, when I started this process last February, I think it's been like 1.5 years, it's been crazy. But now, the team is doing a great job, really great job.
Our next question comes from the line of Ryan Meyers with Lake Street Capital Markets.
Congrats on another quarter of great progress. And just kind of following up on the last question, thinking about gross margins for Q4 actually came in ahead of what I was looking for and expecting, but should we be using what you guys reported here in the fourth quarter and gross margin as a new baseline. And as we progress through 2027, you guys will continue to trend towards the target you gave in the Analyst Day of the mid- to high 20s? Or is there anything gross margin wise that we should be aware of in 2027?
Look, overall, I try as hard as I can not to run the business quarter-to-quarter. Brian asked the question earlier around gross margin and -- no, I certainly don't think we're going to -- God Forbid, we're negative or even below double-digit growth. But there might be some quarters that were much higher, some quarters that were closer to that because just timing of promotions.
Gross margin is similar, right? So we know, hopefully, I've been clear with everybody over since I think -- I don't know, I think this is my 14th conference call, if you could believe that. We're in the commodity business. So that means that there's ups and downs throughout the year, right? It's always harder in the summer. I think we were -- we had some tailwinds in Q4 with the lower chicken prices, and we had really good absorption with the Costco rotation. We will continue. Again, I -- we're planning for. I feel confident that we will be higher 4 quarters from now than we were this quarter. I feel really good with that. But from quarter-to-quarter, depending on what season we're in, we might have a point or 2 dip up or down. So I wouldn't expect it just to keep going up because, again, we have to take into account the seasonality of chicken and beef prices, depending on particular promotions and rotations. So hopefully, that's helpful. But I will tell you, and I feel confident that we will have -- our gross margins will be higher a year from now than they are today.
Okay. Fair enough. No, that makes sense. And then thinking back to some of your prepared remarks that we had talked about on the call. The emphasis on the branded side of the business and the branded products. Can you remind us what the mix between branded and private label is right now? And then maybe are you seeing more demand for your guys' private label products or more demand right now for the branded side of the business?
Actually, I don't know if it's just the magic of Chris and his team, but I'm seeing a lot more branded. I mean, so think about it, the last 3 wins. First, with Food Lion, 5 out of 5 or branded. Walmart, 7 out of 7 were branded. Target, the 2 items that they pulled -- that they're pulling are both branded. So it seems that it's accelerating. I think I've given you guys examples of stuff that was historically private label, like Publix or BJ's, they're now asking it to be branded. So I think that there's more momentum.
Look, we've -- remember, I spoke to you guys about this flywheel effect, I think what I'd say, 65% of people that were on the Instacart that bought in Q4 were new to brand. That means that they had never heard of Mama's before, Mama's Creations and they bought. Now they're a loyal customer, and now they're going to look out for more MamaMancini's new products or Mama's Creations products. So I would expect that we're going to accelerate the percentage of branded because just quite honestly, it sells better than what we've shown, we've proven the velocities are higher when you call it MamaMancini's. Why wouldn't the retailer want that? But that said, if a retailer is absolutely adamant that I am only a private label customer, why would I not sell them a private label item, but you don't get a penny discount, right? Same that's why Anthony allows me to stay here. Margins -- the price is the same price. It doesn't matter whether it's branded or private label.
Our next question comes from the line of Anthony Vendetti with Maxim Group.
Just a couple of quick questions. I was just wondering the -- if you can give us an update on the progress of transitioning, your -- all your chicken products to antibiotic -- and what's the expectation for that being completed?
Yes. It's pretty cool. So many people want to do the NAE chicken, particularly Chris's wife Rachel. She's all into fitness. So she likes the NAE. We're all there. So 100% of what we're purchasing now is NAE chicken. It's going really well. Anthony Morello, Remember, the guy that started Creative Salads. He's been doing a great job helping us. He's our chickens art. He got amazing pricing for us. I think I told you another reason why Crown was such a great acquisition is it more than doubled our chicken needs, and made us a legitimate player in the marketplace that allowed us to have some pricing power. So we got great pricing.
And again, when you're up, right, from a sales perspective, when you're head to head with somebody and one is conventional and the other one is NAE, and I'll make it even harder for us or harder for Chris. If we're penny more, would you pay a penny more to be able to have an NAE product to be able to claim NAE, that's a pretty good selling point. So I love what we're doing. It's just one more piece that differentiates us in the marketplace and holds us in place. Again, I gave you the example of two head-to-head. We're in there with NAE chicken and someone else comes in with conventional chicken. Well, yes, they're going to try to save $0.01, but we worth keeping the NAE chicken. So it's another moat that we've created for ourselves, which is great.
No, that's excellent. And in terms of average, Adam, you mentioned average items carried has gone up. Do you have specific or I'm sure you do, but any specific metrics you can share with us, whether it's across the entire portfolio or in particular stores, let's say, Costco, where the number of items carry in those stores have gone up either on a numbers basis or percentage basis over the last 12 months.
Yes. I think it's -- like I've shared with you, it's harder because we've been concentrating a lot of our sales, which in the club channel, which is where I think consumers are going, and they tend to have fewer items. I'll tell you that in Q4 for last year, I did look -- so 9 of our top 10 customers were either the same, if not more items than they were a year ago. And the other one that wasn't at the time, all I just got another item back in. So it's just bad timing. But I know that every customer, and you heard Chris say at the Investor Day that his goal and actually his bonus, he has to get two new items into each customer. Just the Walmart, the 7 items at Walmart has gotten him on a good start, right? And the 5 items at Food Lion. So I feel great.
Everything that we said we wanted to do, we are getting more items on every major customer. So yes, hopefully, that's helpful.
Okay. That's helpful. And then Lastly, on Costco. So there's 8 regions. How many regions are you currently in? Are you in all 8 regions? And if you're not, what is it going to take to get into the rest? Or can you talk about just the opportunity to expand the Costco relationship in fiscal '27?
Yes. So remember, so with Costco, we're always in somewhere. We're doing lots of different things. I think if you put a gun to my head right now, I think we're in 3 or 4 regions right this minute. But literally, every month, every quarter, it changes. I honestly don't even share with you guys just because I'd bore you to death on every time we get another meat ball rotation, right, because it's happening all the time. Scott and team are talking to Costco. Actually, they had a meeting today, actually couldn't even to fake that. Scott and Chris had a meeting with Costco today on another opportunity. So we're constantly speaking to them. We are top of mind to them, all 8 regions. And again, I think what I'm looking for from Chris and Scott and where the 3 of us are aligned, is we're looking for some set of -- it's a combination of a couple of things. permanency, I don't know if that's a real word. And an example of that, like we're in every item in the Northeast, there are more opportunities to get that rotations of our existing products. And I very much hope and expect to be able to share with you guys new items that we're getting in. .
So the only thing that I can't tell you guys is we're going to get into a new region because I apologize, we're in all 8 regions. But I definitely want to be telling you guys we're getting new items in that we haven't done in the past. Just as a reminder, last year or the year before, I don't know, 5 or 6 items, we had a Melosausagein peppers, 3 different types of sauces, beef, meatballs, chickens cheese stuff, chicken meat balls. Those are just items that we've had in Costco recently. So I love Costco as a partner.
Yes, I just -- and I expect -- we're always going to be somewhere, and I love it at some point this year, just like we did last year, I would hope to share with you guys that for some point in time, we're in all 8 regions at once.
And we have reached the end of the question-and-answer session. And therefore, I would like to turn the call back over to CEO, Adam Michaels for closing remarks.
Thank you, operator, and thank you again to each of you for joining us today. Fiscal '26 showed what this organization is capable of when every element of the strategy is aligned and executing. Our revenue growth, margin expansion, successful integration and strengthened financial position have prepared us for what I believe will be an even more exciting fiscal '27. We have the platform, the people and the products to execute on our vision of becoming the leading national one-stop shop deli solution provider. We are riding a wave that is only getting stronger with a ship that has been reinforced with capital and capacity and an emboldened crew who are harnessing these new capabilities.
Our strategy has charted a course for deli leadership, and we are unwavering in our commitment. As always, we appreciate our shareholders' continued support and look forward to updating you on our progress in the quarters ahead. Thank you.
Thank you. And this concludes today's conference, and you may disconnect your lines at this time. We thank you for your participation.
MamaMancini`s Holdings Inc — Analyst/Investor Day - Mama's Creations, Inc.
1. Management Discussion
So welcome, everybody. It's 1:00. So I think we can get started. So thank you for some of you guys that braved the weather. I don't know, is there any -- so we've been doing this now 3 years, right? So this is my third year. Has anyone been here all 3 years? [indiscernible] is the man, 3 years. Now I'll tell you guys in the 3 years, how many times has there been a [indiscernible] crazy blizzard storm? 3 for 3. That's like in the high 80s percent, right? Like that's pretty good.
So I was telling everyone before if you want a really good stock tip whatever that [indiscernible] system, [indiscernible] or whatever system is once I find -- once I tell you guys when Luke tells me when we'll do the Investor Day next year, I will let you know, you hop your house, and you put it all on there being a blizzard today of our Investor Day. Is that good? So cool.
I really sincerely do appreciate you guys making some time to come here. This is one of my favorite times because while many of you unfortunately have to hear me all the time, you don't get to hear the full Mama's team and it is super cool to hear -- I'm going to try to speak as little as possible and have the team share updates.
The other thing I'm going to ask you to do, you guys -- say you have your iPhones, your pieces of paper, there's going to be a whole lot we're going to share today. Again, hopefully, you enjoyed some food and everything is important. But I want you to write down 1, 2 and 3 on your notepads. And as the team goes through, I will highlight. If you just leave with only 3 things that I believe are significant, I think that's a win. So you write your 1, 2 and 3 on the paper or your iPad or in your [indiscernible] and kind of I'll stop the team just to make sure if you guys don't realize how big it is, I will reinforce one of those 3 big things. Cool? Okay.
Chris, you hear me okay? I'm doing okay?
You're doing great, Adam.
Perfect. There you go. That's my boss, Chris. So first slide, obviously, the most creative are forward-looking statements. More of this information, obviously, you can find at our website. So like I said, today, I really want to be all about the team. I'll share a little bit about hopefully a bit of rating that I'm sure you do of me on how the years -- look, we've been together for 3 years, how it's going. But then as quickly as possible, move into having Chris start off, Chris is on the phone, unfortunately, because of the storm, we'll share some of our updates on all of our commercial activities, what's going on there. Obviously, Lauren is here today to share something she's already been sharing a lot of the marketing stuff with you guys and the brand building. It really is amazing what we've accomplished already in 3 years.
Skip literally makes it all happen. You guys know went on a tour with him today, but as quickly as Chris could sell it, Skip's got to make it, right? So they have a great partnership going on. And then obviously, Anthony will tell us if we make any money at the end. That sounds like a good plan? Okay.
So quick recap of something I'm so proud of. I told you guys, my son does data analytics. So I had to create for him an equation, obviously, that you guys see on top. But it all starts with our people. I will tell you, if the board, we have a board meeting on Thursday, if the Board tells me today this week is my last day. I will not be proud of the revenue. I will not be proud of the profit. I will be proud of the team that we have built, and we're continuing to build because that is everything.
Culture is everything. I told you guys that there have been M&A deals that we've gotten pretty close on, and I pulled the plug because I didn't think the culture was the right fit. Culture is everything. The amazing work that Chris and Lauren have done, you see it. I mean we are growing literally 4x the category, right? Category has grown roughly [indiscernible] literally, the market share gains we're getting, the new customers we're getting, the new items we're getting in, the velocities that are accelerating, I am so proud of what the team has been able to do to build our brand in stores.
Third, I mentioned to you all the work Skip's doing, literally foundational work, foundational work building the people, building the equipment, the CapEx, the strategy, has just been off the charts. You're seeing it in the new technology. You guys just went on the tour, whether it be the mapping process, which increases shelf life, the automation, stripping machine, all of those things. Obviously, that comes all together.
I was just telling George just before that my biggest thing [indiscernible] you say about Adam is, he tells you what he's going to do, and he does what he does. And now hopefully, there's a 3-year track record of this company telling you exactly what we're going to do. And we do exactly what we said. And obviously, at the end of last year with the acquisition of the Cisco division with Crown 1, I hope that is just one more reinforcing mechanism that says [indiscernible] I'm not sure I'm happy with what he's going to tell me he is going to do, but whatever he does, he says he's going to do, he's going to do it.
And the M&A stuff was great. The other thing I will tell you a bit of an unintended consequence is that to extent we get success, I would tell you, I get more inbound every day now because of the deals that we have done already, right, between creative salads and olive branch, [indiscernible] Crown 1. I don't have to make a lot of outbound phone calls. It's coming in here and that's great, and we're building that pipeline that I feel really good about. And I will tell you, I'm not just thinking about the next deal we're doing, I literally have a pipeline of not the deal next time, but the deal 2 times for now. That's how we're thinking about M&A. This is a multiyear process.
And then all of that equals into what hopefully you guys see as a more profitable business. Gross margin is increasing. We're managing SG&A extraordinarily well, net income increase in EBITDA. So the top line is growing and the profit is growing.
I don't need to share with you guys because you guys know better than I do. It is way better to ride a wave then create your own and the most wonderful thing is, this is a category you absolutely want to be. I've said this before, you absolutely decide if Adam and his leadership team is where you want to place your bets. It is absolutely your decision that says, maybe these guys are okay, but I just don't like their strategy. Those 2 are absolutely your decisions.
The third one around is this the category you want to be in? I'm sorry, that is not your decision. It is happening month after month, Nielsen IRI spins, you pick any data you want to see that Deli is absolutely where you want to be. And it's crazy. You're seeing it now the data just came out last week for the next month. Literally, units are growing faster than dollars. [indiscernible] slower for you guys. Units are growing faster than dollars. That does not happen in the food space. And it's just a wonderful thing to see. We're just getting more and more penetration. Our retailers are adding more and more shelf space. This is where you want to be. And right or wrong, I think we're the only publicly traded Deli company in America.
I think the last one for me. I hope you are bored. I hope this is boring for you because all he does is say the same thing over and over and over again. Our strategy does not change. Our strategy is only getting reinforced [indiscernible], cost, controls, [indiscernible] and catapult [indiscernible] Obviously, we're all running, but Skip is driving us. You're seeing higher and higher gross margin that allows us to keep reinvesting in more and more equipment. Again, you guys saw when you took your tours, the additional space, we pretty much just doubled our manufacturing footprint in New Jersey. We've got to build that out. That's the strategy that Skip has been putting together with his team.
Doing that, obviously, the control is so important. I know you're supposed to love all your children equally, Controls is the largest level a little more equally because if you don't have controls in place, can care less what your costs are and even what your culture is, you're just out of control. So that is so important for me.
One of the first things we told you when we made the Crown 1 acquisition, the biggest thing we had to do, it's great, they were already on an ERP system. That's a really good thing. [indiscernible] have that luxury with greater [indiscernible] but we had to move them on to NetSuite. And in the first half of the year, we will move that. It's going great. John is doing an amazing job in leading our information technology, and we're doing great things. But again, what gets measured, gets improved. And if I don't have the data, I can't measure it.
The culture stuff's awesome, the work [indiscernible] is doing, super proud of particularly the Crown 1 acquisition and bringing them on -- we're one team. I really could ask Skip for more color, but I'm super proud of how the Crown team is not just coming in, but like they're eager, they are really excited and are really happy about being part of this team.
And then all the work that Chris and Lauren are going to talk about catapults. I will tell you, there's lots of things I worry about at night. I haven't slept in 3.5 years. Top line is not one them for me. I know we're going to do great things in a very measured way.
Chris, happy for you to take the lead here.
All right. Well, thank you, and thanks for handing over the reins. I'm really excited to talk to this group about our fiscal '27 strategic sales initiatives. It's really built on our success and the strategy we had in play in '26 has given us a great foundation for going forward. So really excited about what this year has to hold as well as when you think about 3 to 5 years ahead, which is where we're really trying to have our mentality as a sales team today is thinking even beyond the year that we're starting and getting into and getting further and further out in our thought process.
But the slide you have in front of you should be fiscal '27 strategic sales initiatives. And there's 5 basic pillars on here. None of them should be a big surprise, but they are an evolution from where we were in '26. So the first one is strategic multi-item selling approach. How we sell is very, very important. And one thing that Adam and I spoke about over a year ago now when we first talked, was selling isn't about order taking, selling is about selling. And our approach to selling is evolving even more into portfolio packages versus single items, going to our customers in a strategic manner and being a great customer partner. And I'm going to talk about that on some of the ensuing slides about what we're doing related to becoming a strategic partner versus just a supplier which is very, very important to our future and our growth.
Second one here is expand average items per existing customer. This is our KPI that we live by. For '27, we're looking for a net plus 2 SKUs or plus 2 items in each one of our top 10 accounts, leveraging both our Bayshore portfolio into -- excuse me, legacy accounts and vice versa. There's still a lot of products even within our legacy business to have opportunities across our legacy customers for us to grow our actual SKU count and combined with the product innovation and working with Lauren and the team there and all the great work they do at bringing new products into play for us.
Third is drive our ACV growth into underpenetrated regions and I would also add underpenetrated channels of business. So it's expanding our distribution footprint across channels and geographies. When I look at fiscal '26, the white space that I see from a channel perspective, was really the mass channel. When you think about Walmart, Target and where the consumer spends a lot of their food dollar today that we were very, very underrepresented. So in some of the ensuing slides, I'll show you where we've had some success or built some foundation for launching in fiscal to improve in that channel, while also continuing to grow across the broad spectrum of channels from C-store to the grocery channel to each and every channel that we deal with today. Club channel incredibly important to us as well.
Two big things should stand out on this slide. First of all, and framed really boldly here is No Antibiotics Ever chicken, NAE chicken. This is a strategy evolution and change as we continue down the path of being very committed and increasingly committed to GRANDMA-quality. What would grandma want to feed her grandkids. And certainly, NAE is the gold standard when it comes to chicken. It's incredibly important today in the increasing health-conscious consumers that we have, people who are concerned about antibiotic resistance, just concerned about being anything that we do additive versus natural in the food process.
So this is -- seemed like a no-brainer type of decision to be able to go this direction and provide it even for our retailers that have existing business with us that haven't asked for NAE, but it's an opportunity for us to then explain another step another reason why our product is differentiated from any potential competition that might be in the market. We already have the best tasting. We already have the most authentic flame grilled product out there. We already beat everybody in cuttings and now we add on another layer of, honestly, protection and authenticity into being GRANDMA-quality.
And the last one on this slide is major account wins and velocity growth. We have to continue to win accounts and grow our velocity we have built a tremendous base. When you think about the added shelf space that I'm going to cover in some slides coming up relative to Walmart, Target, already talked about the mass channel, but also Food Lion, a major grocery retailer in the Southeast, amongst others. So there's still accounts out there. They're getting fewer as we continue to latch into more and more, but there's still some big accounts out there that we deserve to be in and we are going to earn the right to be there in fiscal '27.
Next slide, Slide #10.
Just one thing. Guys, remember, I said 3 things. That is one that you should be writing down on a piece of paper. Like Chris just mentioned, this is a moat. This creates a moat against other players that are not doing that today. So it makes the job easier for Chris as he's selling in differentiator sell. So this is a really big deal that, again, think about, we could talk more about, but that is a big differentiator for us.
Sorry, Chris. Next slide.
No worries. I'm used to it, Adam. So next slide, we're executing our plan, and I put 2 big bold statements on here. Everybody is going to recognize these retailers. Two just incredible retailers, very different approaches to the business. But we've had some great success with. So Costco, #1, I'll go into some detail on the next slide, but amazing things are happening in Costco. And we've obtained our first everyday item status that's been secured in the Northeast for Costco, and it's really where all our business started with them to begin with. I'll walk you through that evolution and as well as why it's so important as we get to the next slide.
But I also want to call out Walmart. Walmart is another just great example of our strategy in play. Eight new items launching in the largest retailer in America. I just want to put it in perspective real quick. It's 8 new items against an existing one. This is massive for us, and I'll go through how that came to be. One of the 8 has already launched this quarter, and then 7 additional items that will be launching are all branded. I'll go into some detail on that as well. And I probably should celebrate the branded part more, but I know I got a slide on it. So I'll talk to that in a moment.
We can go ahead and go to the next slide, Adam, Slide 11. Customer success and channel diversification. And it's here that I can kind of explain the preceding slide a little bit more detail. I talked about diversification into different channels and covering a broader geography across the country. It's also very, very important to our strategy to diversify our products and as well as our channels. But first of all, our sales mix the sales mix needs to mirror the U.S. food budget, not too heavy in any one channel. And we want to be where the consumers are. So growing mass to a more appropriate side, while continuing our grocery retail remaining a very key portion of our mix.
Our acquisition of Crown 1 had no club revenue, did have some grocery revenue and did have some specialty discounter type of revenue in there as well that helps us again broaden. I know I'm playing club down a little bit from a mix standpoint. That is not to say we're not growing the club business. We'll continue to grow it. We just want everything to be proportional. You've heard some of our Costco success. Sam's continues to be a major player for us as well as BJ's. So we're incredibly well positioned in the club channel.
Our fiscal '27 strategic goal of 2 additional items in top 10 accounts, that is coming off of some major wins that we already have in place that it's already catapulting us and setting up our 2027. It starts with Walmart. 8 new SKUs launching in up to 2,000 stores. In complete transparency, some SKUs will be in close to 2,000, some are more than 2,000. It just has to do with the actual planograms in these individual stores. But 8 new SKUs, 7 of those are branded. Target, 2 SKUs that we'll be launching this year, the first one in the first 750 stores will be in this quarter. We'll be following in just a few months with the second one and the stores ramp up to, again, approximately 2,000 stores there.
Food Lion, 5 SKUs we launched here in Q4 as we entered -- made the corner into fiscal '27, and we'll be expanding out to approximately 1,200 stores there in the Southeast, very excited with that.
Costco, I have to dive into it at a little bit. We've got the little mission to accomplish things on there and here. But achieving everyday status was -- has been an evolution over time. And I think the Costco picture really explains our approach and our sales culture at Mama's and how we go forward, not just Costco but all of our major accounts. But if you look back in fiscal 2023, we were doing about $0.5 million in sales, one product and in one region only of Costco. If you fast forward a bit to fiscal '25, we did $10 million in Costco sales with active rotations across the country followed in fiscal '26, the year we just completed. We started the year in Q1 with our first digital MDM and low and behold $10 million we had already met or essentially met what we had done in fiscal '25 after one quarter in fiscal '26.
Continued rotations through the year, but culminated at the end of the year in Q4 with our first print MVM which is really the -- that is the trophy when you think about in Costco as far as moving volume. That exceeded north of $14 million of business for us in that quarter as well. So an exciting year in Costco.
What does all that lead up to? That leads up to the announcement here in the beginning of the new year of achieving everyday item status in the Northeast region. Again, where it all started. Our expectation will be the domino effect on everyday item status, but that's where we are today. That was our immediate win and very, very exciting to us and allows us to have this steady state Costco business.
And I'm going to take just a second, I really want to call out -- I want to call it my partner, Skip and the operations team, this happened because we delivered, and we delivered in very challenging situations to suddenly do in a quarter, $10 million or $14 million of new business. It's not an easy thing to achieve and do it without a hitch. And what I can tell you is from our customer, there were no hitches. So that builds trust. And that constant trust building over the years and through an increasing amounts of trust that they put in us allows us to continue to advance the business, and that's the culture we want to continue to promote.
I'm excited about, if you look over on the right, our new customers across channels in '26, we really cover them all when you think about C-store, the grocery channel, the mass channel, the discounter channel was covered in new customers as well as just a great number of customers that represent large volume for us across the board.
And so that will take me to the next slide, Slide 12. I started to talk about this at the beginning of the customer success slide. But this is our category diversification and branded product growth. It's as important to diversify our products as it is our channels that we're in. And so some great successes to talk about here. We are planning a balanced category mix that is optimal for trim utilization and does give us reduced commodity market exposure. What does that mean? Chicken trim, how does that affect us? If you look over on the right, chicken bottoms and trim utilization, usage of our chicken bottom. So let me stop there real quick. The chicken bottom, I'm sure Adam has explained this because he talks about it to everybody, right? This is -- as we make our beautiful grilled chicken breast, there is a bottom piece that is as every bit as great equality as the chicken breast itself, but it's going to be in varying sizes [indiscernible] it's not that pretty same-sized chicken breast that we sell and we flame grill. So there needs to be other products made from it.
Our use of those bottoms will more than double in fiscal '27. The utilization of our shredding capabilities that came with Bayshore is going to be part of that win along with our Panini category. If you haven't seen our Paninis, certainly, if you're in the Southeast, make sure you pop into public. We've got a new assortment of Paninis in there. These are incredible. They're great to reheat at home. They are a phenomenal item. They're growing at a rate of over 80%. And the primary ingredient in most of these is chicken trim.
Our branded chicken meat ball sleeves have received placement in our top-tier customers. And I've already referred to Walmart, but this is where this gets really big, right? Chicken trim going into the production of a stuff cheese chicken meat ball is one of the 7 branded items that are going across the country in Walmart. Also, one of the branded items that's going to go into Target this year as well. It's one of the 5 branded additions in Food Lion. If I -- if we think about public, one of our great partners and retail partners out there, we've got the panini in there and as part of the 6 branded additions that have occurred in public as we entered this year along with the part of the branded additions in [indiscernible], a couple of other great customers of ours, I could go on and on. These are the top branding wins for us.
And I think a big note to take home as well is we're targeting a 100% increase in branded sales in fiscal '27 as we are known and the consumer recognizes us across the country, it makes us even more enticing to our customers and to open doors into some of those customers we haven't gotten into yet. So an exciting year ahead of us built on a lot of successes.
We can go to -- let's go to talk about trade and trade promotion investments real quick. That's the next slide, Slide #13. Our trade investment strategy is, first of all, we don't want to be a discount item. So I want to emphasize that. You shouldn't be looking for our products to be at sale prices all of the time or waiting it out because they're on sale so often. We are a premium product, and we're proud of that. We're GRANDMA-quality.
But the place for trade promotion has multiple areas. You see it in the leaning in with Costco to get the national recognition and reach this point of everyday status. But where we're going to spend a lot of our trade this year is focused on new items. You've heard me talk about it through this throughout the strategy, new SKUs and our top 10 customers, new multiple branded SKUs across the country. Look, the easier part of the sale tends to be the sale itself, getting the placement, doing all those things, those are where most companies forget. It's the next part and more critical part is getting that customer addicted to our products, getting it in their mouth, getting trial and then -- and the confidence in knowing once that happens, our customers come back over and over and they're no longer looking for promotion. They're no longer looking for a deep discount because our product is worth every penny and more what it sells for out in our retailers.
An example, over to the right, we certainly always do the public branded promos. That's really built our name in the Southeast. But the graphic below shows our how our business was driven and our case sales were driven following conducting [indiscernible] with one of our great retailers. And this was on the introduction of our [ Meals for Ones ] and this is the pull that then occurred after the fact, and you see that upward trajectory. So product gets in the consumer's mouth, consumer loves the product, they bought it for a great discount, but they come back. And you know what, I'm going to buy even more and I'm not paying attention to that discounted price. So it's a great way for us to use trade. We're going to lean in very heavily there in fiscal '27. And -- but it will remain a single-digit percentage of our sales.
Lauren will go in a lot more about our wide arsenal of marketing type of opportunities when she gets to that point. We do support a lot of sampling events as well. And we can go to the next one because I want to talk about people people or what make all this happen or what grows our business.
So one thing we talk about a lot on our sales team and into the development of our selling culture is that everything starts with the GRANDMA-quality products. We want to be proud of what we're selling. I'm not the sales guy that you can give me a broken pen, and I'm going to sell that to you. That's just not how I'm built, and it's not how our team has built. Give us a product that we can be passionate about, that we know, that we feed our own family, and we can speak to that that's when we can sell product in a big way. And that's where we become the GRANDMA-quality service as well as the product itself.
And I think about it anecdotally, I'm getting older. Adam reminds me of that all the time, makes fun of my white hair. But the -- I'm a grandparent now. I'm not a grandma, I'm a grandpa. But I would never farm out the relationship with my grandchildren to somebody else. I have a relationship with my grandchildren, so that I understand their wants, their needs, what it is they're looking for in success in their life, and then I might reach out to like in our case, from a business perspective, we utilize brokers. We utilize brokers as an addition as a service piece, and we have some great broker relationships.
But it doesn't replace the one-on-one relationship. Just like me as a grandparent, I may hire a tutor, I may hire a coach to help one of my grandkids achieve something in their sport but I'm not going to hire them to have the relationship. And that's how we marry that up from a sales team. It requires top talent acquisitions, people who understand that.
We've made 4 acquisitions in the last 13 or so months. We -- this allows us increased direct customer contact and with near and dear as a former retailer is the vertical relationships in our strategic accounts. we get connected at the top at the strategic level. We want to be there to support and understand our customers' needs and build partnership and then have those relationships as they funnel down all the way to the individual buyer, which sometimes can be a single category within the Deli. There are buyers in some of our customers, all say managers, deli salads, that's it. And we have to have that relationship, but you want to be above that as well to understand how that fits into the total picture. So we can go back to what I mentioned earlier, selling a portfolio versus selling individual items.
We are expanding our culinary capabilities in the field. We'll be bringing on a field chef, a great experience, retail-facing chef. We will work to help do direct innovation, directly understand the food needs and the chef needs and the development needs that are within each of our retailers. It's going to be a great asset as we open up the new year as well. And over to the right, you see a picture of our sales team along with a few of the folks in operations, but that's at a plant. We like the team to understand every aspect of our production, what's going on in the plant, what the plant needs are and to make sure we're communicating and having a great relationship with our operations team as well. So that's a picture of the team, don't judge us, but we do follow all QA restrictions and where the hair nets and all that good stuff when we tour.
So that's -- that's it in a nutshell as fast as I could go on our fiscal '27 sales plan. And I think with that, I get to either kick it back to you, Adam, or go ahead and introduce Lauren Sella, our Chief Marketing Officer.
Absolutely. Thank you, Chris.
Hello, everyone. I'm Lauren Sella, I lead marketing for the organization. I'm very excited to be here for our third Investor Day, my third Investor Day as well and talk to you about our plans for next year.
So as we think about brand building, we're really focusing on both the consumers and the retailers to drive long-term growth. Can everyone hear me okay on the line?
Yes.
Okay. Perfect. From a consumer perspective, our priorities are awareness, connection and loyalty. We recently fielded a survey to 575 participants on their their beliefs about the prepared food category. And one of the things we learned a lot of great things. One of the things that we learned is the #1 trial -- the trial generator is Brand I Trust, which really supports our increase in marketing investment going forward, and as we've been doing it in the past.
Our storytelling leads into authenticity and what you've heard us refer to as GRANDMA-quality. We're continuing to build upon our customer relationship management database to really drive our reengagement with consumers and we're also activating more earned media to build upon our paid media channels. From a retailer perspective, we're positioning ourselves as a strategic deli partner, bringing insights and innovation to the retailer to help them with their full meal solution.
We're also expanding our presence through trade show participation, advertising and thought leadership and we're supporting our innovations with a full portfolio of activation, as Chris alluded to, things such as trade marketing, trade promotions, in-store demos and retail media, which I'll talk about a little bit more.
Just recapping our activation and some of the highlights from last year. From a consumer activation perspective, we added in additional marketing activations last year. We started doing some micro influencer activations really to support key in-store activities such as our Costco NBM or our public launch as well as brand partnerships. Adam mentioned earlier during our lunch, how we did a couple of partnerships with another brand in the space, Brooklyn Bread and then we also brought in Mike's Hot Honey and those are things that we're going to be continuing to do.
We doubled our email list, and we added 8,000 new SMS subscribers, which is a really strong reengagement platform for us, and it's a great own channel for us, a way for us to communicate to consumers as we have new news to engage them also on B2C activities. And then we improved our site help to 96%, which I was told is more than best-in-class. I'm really excited about that and really strengthening our digital ecosystem.
From a B2B perspective, we optimized our strategy and really focused on prioritizing our trade show presence to the most impactful ones. We generated over 100 new leads and then also received new inbound retailer interest through B2B advertising, which we started for the first time last year and will be continuing.
Then moving over from the portfolio innovation perspective, we launched Mama's Creations branded items into public and BJ's. And we expanded MamaMancini's with our Paninis and [ Meals for One ], increasing both the dayparts and the usage occasions for our [indiscernible].
And then finally, from a retail media perspective, we doubled our retail media investment last year. We added 4 new retailers, and we drove significant grows at about $8. I think a little bit over $8. We see significant performance on the retail media platforms, particularly as we have these Costco rotations. A lot of consumers are purchasing their Costco items on Instacart. So we make sure that we're present on there, both from a search perspective, we also do display advertising, video advertising, and we have good relationships with Instacart. And so we're continuing to expand and see different ways that we can build upon that relationship.
Chris mentioned from an R&D innovation approach, we're making sure that our innovation is really supporting margin health, not only top line expansion. So Chris already talked a lot about the chicken trimming, but it is a key priority for us from an innovation perspective. It allows us to have greater control over our yields and our cost. And we affectionately call our chicken bottoms, our artisan cut products. They really are -- I mean, the folks in the room tried some of the products here that Costco cheese chicken meatballs and really are premium items that we're excited to bring to consumers.
And then as Chris already mentioned, we're launching multiple new Walmart items that use these artisan cuts -- these artisan cut pieces. And this really allows us to innovate across multiple product categories. So the ground chicken for meatballs. We have the cheese of chicken, but there are a lot of other ideas in the pipeline. Chris mentioned how we're how we're focusing not only on this year but 3 to 5 years out. So we're constantly building our flavor bank. Folks in the room met [ Chef Min ], and he's always building out new product ideas in the areas that we're focusing on. And then our paninis also use the trim and then as well as our [ Meals For One ]. So we're leveraging this innovation across a number of different platforms. We know that these are categories that are growing for retailers and consumers, things like handhelds. Obviously, chicken is a very strong and growing protein. So it's exciting to be able to bring a lot of innovation in the space that benefits consumers, benefits to retailers and also helps us as well.
And then finally, as we look at fiscal '27, our goal is to increase our marketing investments by 50%. And really, as we look at a new item launch, we look at it through 3 phases across the full shopper journey. First is sticking in their mind, building awareness. From the retailer perspective, we're attending trade shows. We're submitting ourselves for awards. I can't tell you what, but there may be an award sometime in the future that gets announced, it's an embargo now.
We're also, as I mentioned, we started doing B2B advertising, which has been -- has proven very successful for us. There are a couple of instances where retailers have seen our ads and have reached out proactively to our sales team. It's creating [indiscernible], so that's great. And then ensuring that we have the right selling tools, again, folks in the room, you see our brochure, which we update on an annual basis.
And then from a consumer perspective, I look at it as they're living their life. So things like influencer partnerships, digital social ads, earned media, which is something I mentioned earlier that we're reengaging in. We are going to be doing more PR this year than we have in the past year and then product placement as well. So that's something that's always fun. We work with an agency that you can find us in different game shows or movies or TV shows. So just a way to drive awareness of our brand.
And then when the consumer is in the shopper mindset, the retail media, content and search and Instacart, as I mentioned. And then once we're in store, ensuring that we have -- we're getting in their cart, through all of the trade promotion that Chris and his team is doing, from a marketing perspective, we're partnering up with the sales team, ensuring that we know when we are on ad and supplementing that we have the right demos. Demos are a big part of our Costco relationship. In-store displays, that's something we're working on enhancing and testing in the near future, even our on-displays.
Point-of-sale. Adam's parents are always giving him also the circulars from public every week, every time we appear. So we always know we did our job [indiscernible] what we see the circular on his desk.
And then finally, after they purchased driving that advocacy and customer retention, one of the things I -- we started in the last year, 1.5 years, is putting QR codes on some of our packs. These are customized QR codes. And when you scan the pack, it will take you to a specific landing page. So that allows us to do things like on our Costco [indiscernible] we offer consumers the opportunity to get a coupon for repeat purchase to drive second purchase of the item.
As well as our e-mail marketing, I mentioned that we doubled our list in the last year, something that we can [indiscernible] started the SMS, which allows us also to geo target. So the SMS really came out of some digital advertising that we did in the public location. So when we have a promotion at Publix, we'll send an SMS or when we have a new rotation with Costco, we can send people text messages and emails, so really driving that loyalty.
So that's really our full portfolio partner, obviously, with Chris and his team and Skip from an operations team to ensure that we're always working effectively, and we're all connected on all elements of this because all of us have to be part of this success to make it work. Thank you.
And now turning it over to Skip.
Okay. Thanks, everybody. Skip Tappan, COO for Mama's Creations. And I was doing a head count from the back of the room, and it doesn't seem like we lost anybody on the tours. That's a good sign. You all remember here and Adam shared over the last couple of years, one plant, 2 locations. So as of September 2 of last year, we are one plant 3 locations and maybe in another few months. And a few months after that, that number will continue to grow.
But some of this might be a little bit of a review for Farmingdale because in the summer of 2024 is when there was a large capital expansion in the Farmingdale facility just a couple of months before I joined, and basically took the existing facility and reconfigured it and added about 10,000 square foot of usable space. That was the addition of Grills and our Spiral [indiscernible] and additional trimming capability [indiscernible]. And so this was just a real huge unlock for increasing capacity in a fixed footprint of the operation.
One of the other things is it started last year and has really solidified this year is the use of contracts for our commodities and our proteins, more contracted pricing, both for [indiscernible] chicken. In this particular case, with the addition of Bayshore, we were able to look at our chicken purchases as one company instead of 2 different separate organizations and really put a much higher percentage into contracted pricing for our chicken to not only be able to have better visibility into what our commodities were going to be, but also for better cost control.
The trimming and tumbling, which you all have heard, some of you have heard before, is one of the really the biggest unlocks for us. The more that we can trim chicken ourselves and tumble it and then marinate ourselves, so that's one of the biggest gross margin unlocks that we have. And we're going to more than triple or double to triple what we have done in prior years with the addition of [indiscernible] we look at everything collectively. So it really is the slides that you saw from Chris earlier, where we talked about the artisan cut chicken, not chicken bottoms, but artisan cut chicken, as Lauren said. I know. [indiscernible] I actually came up with artisan cut. It took a year for it to stick, but that's good.
But anyway, that is really the big unlock because when we trim the chicken and we cut the perfect portion breast out of it, the artisan cut piece, if we don't use it, then obviously, it's just a waste. And the more we transform that in the strips or meatballs or shredded chicken or diced chicken, then we have this better balance of portion cut chicken as well as the remainder chicken that we use in our other items. So the fact that we have a sales plan linked to the marketing plan linked to our purchasing plan linked to our operating plan really makes us a much better balance and why we can able to fully realize the gains that come from that.
All 3 plants, I'm going to mention this one on this, but all 3 plants have a slightly different shift schedule, but none of them are running 24/7 yet. So on one of the tours, I mentioned the difference of staffed capacity and bolted down capacity. You all have heard Adam shared that before. If the equipment is on the ground, it's bolted down. If it's not running, then it's not staffed. So if we think about where we're going to try to get better asset utilization, it is really making sure that when we have assets, they're running, we're using, they're running efficiently.
And we have some room in our schedules during the week as well as weekends to be able to continue to increase our throughput and our capacity through just our bolted down capacity. That doesn't mean that we're not going to focus on efficiency improvement. It doesn't mean that we're not going to also have some capital purchases in the future, but we really want to sweat our assets to get the best return on invested capital.
Also in the other facilities, you'll see this, too, but partnering with Bayshore, when we added Bayshore, there was multiple benefits that came from that aside from the customers, equipment capabilities with people. But the fact that we truly can't operate as one plant 3 locations means that we started within the first month of moving some items into Bayshore out of [indiscernible] here just to help us prepare for that [indiscernible]. And the fact that we had the right integration process just really made it much easier for us to be able to do that. And we're now going to add more and more customers to the Bayshore business from our legacy business as well.
And the one thing that is also that Farmingdale has piloted, some of the folks there have been amazing operators, but they've not gotten into as much of the data analytics. But in the last year or so, this team has actually taught themselves in a lot of cases, how to do much deeper data analytics and have gotten so good at that, that is actually piloting some of this work and role modeling up with our other sites. So we really are operating much more seamlessly than we have in the past. And it's great that the Farmingdale facility has been able to make such a transformation sort of leading the way for the others.
East Rutherford, which you all just went through, there's a 19,000 square foot warehouse attached to the side of it. Both tour groups got to hear the fact that we're partnering with an industrial engineering firm that is not only looking at the physical footprint and the physical space, but the way product flows throughout the facility. So again, we're trying to make sure that we're as efficient as we can be before spending any capital to ensure we're getting everything out of our assets.
And then we use that space. We'll use that space for extra refrigeration and freezing for extra production manufacturing, material flow to really unlock what doubling the size of this facility will actually be able to provide us.
You saw some of the examples of prior investments in technology with the MAP technology, Modified Atmosphere Package and we have more on the way. And one of the things that has also become obvious with the acquisition of the Bayshore business, which is primarily refrigerated, I'll talk to the build a stock model in a second, which we did on the floor. But as much as we've used frozen as our ability to be able to build the stock, now we need to be focusing even more on greater shelf life on fresh items, so we can still maintain that bill-to-stock model, but on refrigerated items and not just have it be frozen.
Same examples of shift schedule. Yes, they're running 5 days a week, sometimes 6, 2 to 2.5 shifts, but we have schedule optimization in this facility that will also allow us to get more out of the existing assets. The one thing that East Rutherford is doing also for us as our pilot, you all heard about the 3PL facility that we're using 30 minutes from here. We are limited to the size of refrigerated and frozen storage we can have on site, but we don't want it to be a constraint to our growth.
So we have turned to -- starting last June, we turned to this 3PL facility, Lineage, that has been a great partner with us for our first really true 3PL experience. And we see that, that type of engagement with outside third-party partners as something that will help us continue to grow when we have constraints on our existing footprint.
Bayshore, and I think you'll see a video right after this since we all couldn't be in Bayshore, you'll see a couple of minute video about that. But this facility is double the size and square footage of our Farmingdale and our legacy East Rutherford facility. It will be about the same after we build out the space. But it is a great facility. There was a large capital investment into the facility prior to our acquisition, and we'll talk about integration here in a minute.
But one of the things that they have is that our Farmingdale facility can only trim so much chicken from a physical space. The size of the Bayshore facility is more than double that. So when we actually show the amount of chicken that we're going to trim in this next year, 2/3 of that is going to be done to the Bayshore facility and 2/3 will be consumed at Farmingdale and over here at East Rutherford. So again, being able to really truly operate as one plant with 3 locations, it's just really -- it's going into all aspects of it from our raw and pack material purchasing to our processing and to our finished goods.
I think the other thing is that on the last statement officially onboarding as the part of one plant 3 relocation strategy, as I mentioned, in the first month, we were moving items between our plants within the first month of September. We did a couple of more items in October, November. And now when we work with Chris' team and looking at what the future forecast is for this year and next, we don't want -- we want Chris to be able to sell with unconstrained demand of -- so that production operations is not limiting what they do. That requires this crystal ball to be a little more clear and for us to be able to develop and have improved throughput and capability that hasn't existed in the past that we're really leveraging this integration to help with.
And I've not seen this video, so I'm hoping to use some good AI to spruce me up a little bit.
Okay. Here goes nothing.
[Presentation]
So we just wanted to try to give you a glimpse since you couldn't be there as to what the Bayshore facility is like. So it really is a great facility. It has a little more elbow room than we have here at East Rutherford. But again, that's one of the reasons why we're grab the attached space to the building so we can really spread and operate more efficiently.
To really talk about the acquisition and integration on this, and I'll highlight on this top right slide here [indiscernible] slide in a minute. I think most of you are familiar with what the deal overview was for when it got announced and what the acquisition cost was. The facility is 42,000 square feet; revenues, $56 million, and Chris of course, will make it go higher than that. We added 200 employees roughly to the team, and it's only 10 miles from Farmingdale's.
So that -- a couple of things that I want to highlight on there. Number one, Adam has shared this before, but we really -- when we acquired the business, we acquired great talent and great people. And recently, just a couple of weeks ago, we announced to the company a dozen or more, dozen to 15 different promotions and leadership changes that occurred across all 3 locations.
And what we -- this is the first time in my career ever that we've had this amount of a percentage of leadership moving to new roles at the same time, where we have a critical mass really starting out the journey together. So it's almost like their own sort of cohort. We have individual one-o-ones with everyone, but we've moved to an enterprise level sort of where we do HR, procurement, planning, finance, obviously, maintenance and it's really looking at it as a company instead of individual locations. So not only did the talent that we acquired with Bayshore unlock or gave us the ability to help unlock some of that enterprise level capability, we had folks that are in our existing businesses that were chomping at the bit and raising their hand and say, I want to do more as well. It's a great opportunity for us. It was a really big celebration moment for us as a company.
Having Bayshore [indiscernible] so close together also allowed us to have single point of leadership that could be over multiple locations, people flowing to the work, technical resources, hourly folks. So if we have overtime needs or last-minute demands, we can flow to the work. So that proximity has really, really helped.
One of the things we did early on out of the gate was integrating 100% of the Bayshore suppliers into the Mama's network. So we sort of got rid of the middle man to be able to operate more efficiently. Next step has been, and we're in process now of using the scale of the 2 sites to be able to find the best combination of suppliers that can service all 3 locations instead of having individual ones.
The NetSuite, you heard about that earlier, but we're working on converting over to NetSuite to be on one single ERP system by the middle part of this year. And already mentioned the organizational changes. The other thing is that the gross margin journey that we're on in Bayshore, we have a legacy glide path that we've delivered in East Rutherford and Farmingdale, and we have increased expectations for this year. And over the balance of this year, we will bring Bayshore into the same sort of gross margin performance as the rest of the business.
The revenue strategy, Chris talked a little bit about this earlier, but we are -- like the rest of our legacy business, we're looking at exiting lower-margin business, in this case, our street business and replacing that with higher-margin branded growth and using that facility capabilities to help support that.
And they're also doing -- Chris' team is also doing cross-selling between the Mama's branded customers and the Crown 1 branded customers. We got into some customers with the Crown 1 business that were not part of the Mama's base and vice versa. So now we've been able to do that cross-selling.
The last thing here was around the Crown 1 integration playbook. This is really using our M&A playbook and using the Crown 1 integration to help us inform what the next acquisition will look like, things that we missed and how we make improvements on that. On the top right of that slide, really, and I highlighted this when we were on the tour. Again, we are -- we have methodology and assessments that would say that we could get up to 50% of increased capacity of our existing network without spending capital. That is through schedule optimization, that is through doing good old-fashioned industrial engineering optimization work, process optimization, reconfiguring how our lines are configured. And if we put some modest capital up to 100%. So when we think about our growth and you do the math, 20% year-on-year plus acquisitions, this has us going out several years still being able to absorb that organic growth and acquisition.
Again, 3 things. First one, you're going to hear this at least 10 more times. First one, obviously, NAE, huge differentiator for us. Two, hopefully, you guys were a little happy with Chris' modest wins at Costco and Walmart. This would be my third one. This is huge. The amount of work Skip's built his team, Shane and Carlos and others that are helping now every day on process improvement. I've given you guys some examples that you say, Adam, this can't be true, you're showing the AI pictures, no. There really is this much opportunity. And the fact that Skip has seen that with his team and going against that, that would be number 3 to me pretty big on we can expand just fine with the 3 facilities.
Thank you. Hey, everybody. I'm Anthony Gruber, I'm the CFO of Mama's. I've been here for about 3 years. I think about 2 years, 2 weeks after Adam joined, I joined the organization as well. And it's been a pretty nice glide path from there. We've been able to accomplish a lot in a short time. We have 3 locations now, which is awesome, one manufacturing facility. But I'd just like to take you through the targets that we have for the upcoming fiscal year 2027.
So on the top line, we're looking at double-digit growth. As Adam said, the area of the deli prepared food area is growing about 5%. So right now, we're pretty far above that. It's quite nice. We're going to continue, and we do anticipate growing that sales line. The gross profit, we have been growing that and having it grow kind of quarter-over-quarter, year-over-year, we'd like to get into the mid- to high 20s or lookouts. Some of the ways we're going to do that and some of the ways that Skip talked about, was by trimming. So trimming more, using those artisanal cuts, Skip's word, I do believe, from a year ago and putting those into some of our other products that trimming unlocks a lot of efficiency for us, a lot of costs that we don't have to waste on buying trimmed product that's already been tumbled for us.
We get it in-house, and we're able to trim and use that product on some of the things that we had for lunch today, which were like the cheese stuff, chicken meatballs, which are one of my favorites, I must say, and one of my children's favorites as well.
Commodity costs. We talked about some of the contracts that we have in place. So we're trying to stabilize the cost across the year. We can see some headwinds from time to time in different commodities but we also work with different commodities. When we started the organization, the biggest commodity and probably only commodity that we really looked at was beef. We're now on to chicken, and we're on to vegetables and other things as well. So that kind of controls the costs.
And then the one manufacturing facility, 3 different locations as well. So we truly look at all 3 locations, Bayshore, Farmingdale, East Rutherford as interchangeable, and we can move production from one to the other, depending where we're more efficient, if we have capacity constraints in one, we could move it over to another. And we can use machinery that may be off-line or maybe more efficient in making the product. So we're confident that we're going to be able to meet those gross profit or gross margin percentages.
Operating expenses, G&A. So marketing spend, we're looking at increasing at about 50%, and that's going to be balanced with what type of margin that we're pulling in. If we see the margin is not coming in, where we'd like it to be, we're not going to spend as much on marketing. Same thing, which you don't necessarily see on this slide, but we have gross sales and to get to net sales, we spend dollars on promos. So we may look at that promo and marketing in kind of the same light. If we don't have the dollars to boost that margin and bring it to where we want, basically, our levers are to pull back on the promo or the marketing. And if those margins start to come in higher than where we're anticipating, we can also use those levers and start to do a little bit more promo, a little bit more marketing, which will then just facilitate more sales and more brand awareness as we go through the year.
Investing in the build-out and continuing investment in the build-out of the middle management. I think Adam has talked about kind of the team that we have built at the top and the leadership team, very proud of everybody that's come into the organization, and we feel pretty confident in the group leading the organization. This is to round out that next layer of management and make sure that throughout we're kind of picking up the little areas that we can make a difference in either in margins and bringing in the right people to get us further along the line, different thought processes.
And then on the OpEx side, we're targeting about 20% of sales, and that's without the marketing spend. So -- and that all goes in line with building the management capacities at the middle management level. So building that world-class team, not at just the top level, but it's starting to trickle down. Skip was able to speak and he talked about the promotions we were able to do internally. Those are not just promotions for the sake of promoting people. It's people's wants to get up to that next level and really putting in the level of work that showed us that they're able to get to that next level and make the company very efficient.
Other income, interest. We're going to keep paying down the debt that we have. We have a very small amount of debt. The purchase of Bayshore, we were able to do -- we had the line and the bank right behind us the whole time. They offered more money to us than we even wanted to take. But what we were able to do is do a pipe at that point in time, use those dollars and pay all our debt off. We wound up being in a better cash position and in a better debt position after buying Bayshore than beforehand.
Plus now, we have a whole new facility and a whole another round of sales and a customer base that came with it that we had not tapped into in the past, which is 3 wins, I think I mentioned there. It was a pretty good acquisition. Very happy about that. So on the net income side, going from the low single digits to kind of the mid-single-digit range as a percent of revenue. So basically, looking at the levers that we have to control our marketing, our expenses, our promo and then becoming more efficient in the manufacturing arena. We've made a lot of headway there. We've become more efficient, but there are always a lot of other opportunities ahead of us. We see that year in and year out. They're a bit smaller over time, but they're still every time we acquire another organization, we find another bunch of items that we can capitalize on, turn that into dollars, make it more efficient for our gross margin, grow the bottom line.
And on the adjusted EBITDA side, going from kind of get into the mid-teens vicinity and keep that going on the way forward as well. We'll be investing in the organization. We do anticipate and we always look at M&A opportunities, they come through, and I could hear Adam speaking about them in the office next to me all the time, and I always ask him to get a lower price. I bang on the wall a little and -- so sorry, you got to take another $1 million off of that price, and we'll get that company for a good level. We were able to really grow the organization, I think, in a really beneficial way by the Bayshore acquisition this year of Crown 1.
So very proud of what we've done this year. And thank you, everybody, for making it out here, especially during the snowstorms. Yes, Ada is 3 for 3. I think during next year, I [indiscernible] back the other way. I don't know, 3 times you're out. So I don't know. And then [indiscernible] to Adam for some closing remarks.
Thanks, Anthony. So super quick because I want to do Q&A. But look, again, I want to bore you, our M&A strategy hasn't changed since the first day I started communicating it to you. So we have this one-stop shop. Again, we tell you what we're going to do, and we just do what we say.
Acquisitions. As we get bigger, obviously, the acquisitions will get bigger. We've done a number even in my past life, a number of acquisitions that I find ironically, the smaller the acquisition the harder it is to integrate. So we'll grow with it. And then our deli strategy our M&A strategy in the deli space with existing manufacturing and then the third one, actually, Chris and I spoke after he send me a love note after the storm, hey, Adam, you get off your butt and find me something not on the East Coast. So I'm working on that. But yes.
Look, [indiscernible] measure of success. Again, this -- and again, I'm not even going to apologize. I hope this happens. I hope you guys are just getting so bored because all -- I just said the same thing over and over and over again. So the same metrics that we've been tracking this whole time, what gets measured, it's improved, right? So all the work that Chris is doing around increasing AI getting to new customers, all the work that Lauren is doing on increasing the ROAS, the return on advertising spend, at these players, the work Skip is doing to drive more and more efficiency throughout the plant network, all the work Anthony is doing to manage SG&A so well, these are all the things that we're putting together.
So with that, I will open up for questions. You get extra credit for not asking me and putting Lauren or Chris or Skip on the spot.
But Mitch?
2. Question Answer
So you're rolling out a new items [indiscernible] more customers. Are you -- when the customers are evaluating, are you getting them any data [indiscernible] how does that kind of [indiscernible]?
Yes. So I'm going to [indiscernible]. So first, the question is, and I'm going to have Chris answer it. The question is when we go to a new customer, how do we help -- how do we sell that in, right? Do we share information about the product, maybe at another customer or why -- Lauren, why we did consumer insights work to say that this labor is better? Chris -- how do you sell, Chris, is the question that Mitch is asking.
If I tell you that I have to kill you. I mean it's like the top secret stuff. No, it's multifaceted. And sometimes it's a little bit situational, depending on what you're hearing or what I'm hearing or listening to the customer express. In part, it would be -- it comes from the data we have from existing customers. So we know we're never going to share proprietary type data, but we can rank products, we can rank flavors but it's also tapping into things like the Food Marketing Institute or IDDBA and the other data that we pull about what is the consumer is looking for and where the trends are going. So we'll utilize that as well if that's the tone of the conversation.
But some of it's a little bit of judging what the customer needs to hear and how our product is going to solve maybe their angst a little bit. What I'm seeing a lot out there is people being charged with moving forward their fresh business, moving forward prepared foods, and that hasn't necessarily been where their history has existed in their roles. So they're just looking for somebody to come and say, hey, how do I get this done? What should I be looking for? And so that's where we're reaching back into a lot of industry data as well.
Sort of related to the question on selling. So idea of portfolio selling versus single item is intuitive but it's sort of seems obvious like why weren't we doing that previously, like what changes in the sales [indiscernible]?
So the question for Chris -- well done, guys are doing really well. 2 for 2. The question was -- of course, everyone is going to say they want to sell in a portfolio, not a single item. Why is that winning, I guess, is your question?
Why wasn't that happening?
Why wasn't that happening before?
Well, I think in part -- it's a great question, actually. But in part, that is because we didn't quite have the breadth of items. So when you think about what we did in fiscal '26 and what we're continuing to do now, is develop out these items to where it is more a hand-in-hand portfolio. So if I'm selling into a customer and they're saying, hey, I really love -- the star of the show is always our chicken breast or our beef meatball. I mean that's always just the start of the show. But it's like, hey, you need a category play here. So if you bring in shredded chicken, if we let a sample to shredded chicken to you, let a sample chicken strips to you, oh, by the way, we've got this [indiscernible] chicken meatball and you can start to build out a total solution for your customer. That's always helpful in the selling process, and it's yielded some good results for us.
But probably the biggest reason we didn't sell more portfolio-wise in the past was we had more limited portfolio in a lot of ways than what we have to work with today.
Yes. I would actually add, I think what Chris said is just really powerful, and it's even bigger than the sales question you asked. Our success begets success. So Chris is absolutely right. We didn't have anything else to offer except the meatball. I can either give you a meatball or I got nothing for you. The same is the case. I always have positive intent for before this leadership team came. I would have loved to have bought a shredder. I couldn't afford it. I wasn't making any money, right, before we all got here.
So now I actually have equipment I could buy, hey, why didn't you hire Alberto our head of procurement. Why? I didn't have any money, right? So before we all got here, we had no money. So I'm sure the team might have thought to think procurement is kind of important in this industry. So what's really great, and I truly believe this is the better we do, the faster we're getting even better. It truly is the acceleration, right? [indiscernible] again, my son will be proud of me, acceleration versus velocity. Our acceleration is going up, the speed at which we're growing is actually going up because we have the products. We have the customers. We have the equipment. We have the people. And that's what's so exciting and why I truly believe you didn't see nothing yet.
Adam, there's another aspect that I want to piggyback on. 100% right there, but it's also -- when I was referring to GRANDMA-quality service, in the past, we had a very tiny sales team and everything was done through brokers. And again, I'm not negating brokers in any way. Those are very important relationships. But oftentimes in that selling environment, there's a cutting on chicken breast at Albertsons. I'm just kind of making that up. And the broker says, hey, send me your sample. Versus when you have the developing relationships that we have as well you get the understanding of what are you looking for in totality? What is your strategic need?
And now I can come to you with 5 or 6 items and present -- it's not about a cutting where I'm just sitting against a competitor. So we have a lot more meetings now that are -- there's no competitor in the room. There's nobody cutting against us. We're having a strategic conversation and that we're being invited to, yes, share all 5 of these items. Let's try them. Let's go forward. I think that's a big differentiator as well.
You have big budget increase this year, 50% [indiscernible]. And with the mantra that which is [indiscernible] can be improved. [indiscernible] specific measurements on the marketing [indiscernible] you look to see that work [indiscernible] whether you gave the examples of Brooklyn Bread or Mike's Honey or doubling the retail and [indiscernible] retailers. Like what are some metrics with that market increase that we can [indiscernible]?
Yes. The question is how we're going to measure the increase in marketing, the effectiveness of the increase in the marketing spend? We're not at a level, and I think I said this in the first investor conference, where we're not quite at the level to do full multivariant marketing model mixes. But where we do measure things such as our retail media, we see the return on ad spend there.
And then there are other ways that we can measure the effectiveness, things like looking at our engagement rate on our digital media, for example, things like building our own channels. So last year, we doubled our e-mail database, and we added 8,000 new SMS subscribers. That's a powerful tool for us because we own that. We own that information. We can have one-on-one conversations with those consumers. So those are ways -- things -- other indicators like the health of our e-commerce business, which is a function of other -- we do advertising on that as well on social media as well as e-mail marketing.
So open rates also are -- we are always looking at our at our website, I mentioned the site health was improved significantly and in the top tier. So there are a number of different metrics that we look at quantitatively like the kind of the [indiscernible].
[indiscernible] the checklist you've come through?
Chris, the question is, what is the opportunity at Costco?
Do I get to put a ceiling on it? No, the opportunity is really probably in the near term, everyday status in every region of the country. That's kind of how we approached getting rotations in. That's how we approach getting full acceptance across all the regions so that we could do something like an MDM. And now it's that progress to get everyday status. How many items that could eventually be? Costco runs a limited assortment. So you're probably never looking at double-digit number of SKUs in there despite what Adam tells me, right? He says, hey, Chris, you got to do, but always do my best. But it's get everyday status and then what's the next item you can get every day status.
Your growth expectation for the year double-digit revenue growth, could you be more specific at all. Is that organic growth? [indiscernible] because you're still lapping the [indiscernible].
So I believe -- again, I want to continue to tell you that we will beat the market, we'll grow market share. I would tell you that, that double-digit growth is organic growth. So I don't count. So it's really good, really good on the record, right? I don't want to guarantee you. I'm telling you, I'm not going to -- I do not put pressure on us to acquire a business every single year at all costs. I'm going to pay 50x revenue because I told you guys I'm going to buy a company. I've told you guys that we built a plant. The plant had 0 inorganic growth. I tell the Board, I have no corporate goals of acquiring a business every year.
Personally, I know from my experience across multiple companies that I could digest an acquisition every year, and that tells me that once Skip gives me the okay, I start looking. But that inorganic growth has nothing to do with the algorithm of I'm going to get to double-digit growth. I will never get to double-digit growth because I acquire another business. Is that helpful?
Yes. When you get to the final [indiscernible] to go after the independent channel more? And is there [indiscernible] the path to actually get through [indiscernible]?
Yes, Chris, the question is, is there opportunity in the independent grocery channel?
Yes, there's -- yes, there's opportunity, a simple question. There's opportunity in every channel. But the volume and the distribution component in the independent grocery channel gets a little bit more challenging. It tends to get a bit more expensive to distribute into independent grocers. For instance, they don't have their own warehouse facility or you're going through a third party. We have business in that channel today, and it does well for us. So I would just say there's no channel that I don't have on my list. I wouldn't put it as a top priority on my list today.
You talked about volume growth outpacing sales. And that's great because volume growth is hard to come by in the broader category. But just curious if you could maybe provide some of the pricing outlook that you have for the category because that does obviously imply some central pricing pressure when the volumes are outperforming the sales growth?
Yes. So the question is -- and this will be for Chris and then I can always add is what's our thinking on pricing for the year ahead? Yes, Chris?
Yes. Right now, we want to continue to show great value for our customers. So I would see pricing relatively in line with inflation through the year, but really, we're -- what we see in the gains that Skip and the operation team brings from an efficiency standpoint and improving our COGS, or better position and stability that we have relative to the amount of our chicken that we have under contract, all helps us not have to get kind of crazy and get our growth simply out of inflation.
I always like getting growth, a balanced approach in everything we do. So there's got to be that balance between volume and inflation along the way. We got some good inflationary growth last year. But I would anticipate it to be, nothing that's going to outpace what we expect from a food inflation standpoint.
So I'll just add a couple of the dirtier things to it. So one, reading recently, the markets, not that they know anything, but everyone's thinking that food inflation is going to be actually lower this year than where it's been in the past couple of years. It's certainly not -- it's going to be above 0, but it's certainly going to slow versus where it's been. So that's just one piece of information.
Second one is I like -- and again, also, Chris gets to disagree with anything I'm about to say. So he's the boss. Two, I like where our margins are roughly now. So the good news is we're in the right place when we all started 3 years ago, nothing was in the right place. So that leads me to point 3, which is, if we will keep up with inflation like Chris said, we're in a good place. We don't have to push any harder. Skip has done an amazing job with managing our chicken commodities are the biggest driver of why we would need to price.
Chicken, we're in a very good place from a contracting standpoint. I think chicken is relatively stable. It's going to go up in the summer like it does for the past 250 years of this country and then go down, but I think we're in a good place. Beef, as you all know, that it's on the front page of every paper in America, is a little bit silly right now, right? I do not believe that's going to come down anytime soon. But Chris and his team are working to make sure that we're at the right price.
And then, again, if you told me -- roughly, if you told me that there's no inflation whatsoever on any of our products this year. I would tell you there's really no need for us to price this year. But we're just going to keep up. We feel we are proud of our products, I think we do good work. I know we're all very frugal. And obviously, if inflation goes up, we have to -- you see it right along with us.
[indiscernible]
So Chris, the question I'm going to combine it with the question Brian asked because I'm telepathic. The question was the new items, how many stores is that in Walmart? And the second question from Ryan, not from Adam is, Chris, why are you no good at your job and why are you not in all 5,000 stores immediately? Obviously, I added a little artistic color to that. But the question is, could we -- is 2,000 the cap or could we be in 5,000 stores, was the question from Brian?
Yes. I don't know what the cap would be. We certainly could be more than 2,000. So approx -- again, I would use that approximate number. I think in total, we're in 2,150-ish stores today. It goes up constantly, but there's a mix of items in there. So on average, it will be 2,000 stores. It tends to be the stores that have the best opportunity from a Walmart perspective, from a fresh perspective and from Deli. So if you think about their stores, super Walmarts versus regular Walmart, that type of thing, that dictates it. But yes, there's potential for more stores. There's more stores that have deli operations [indiscernible].
Yes. Lauren, on marketing, you said that the #1 driver of trial [indiscernible], but to trust the brand, you have to know the brand. I would like to hear a little bit more about what [indiscernible] to get customers trial in different markets or rather in different channels?
And related to that, you do some private brands with brands that people do trust. And just how are you thinking about that part of the business as well?
Sure. So the question is how do we build awareness and trust with our products? And then how do we approach private brands? So a couple of things. I mean we use different marketing levers depending on who the customer is, what the items are still, for example, with Costco, one of their big vehicles in general, for the retailer, it's in-store demo sampling, and we participate heavily in that as well. So that's an area where we're building that awareness with the consumer and it's clearly working for us, as Chris mentioned in terms of the growth that we've seen in Costco, especially as we go into new regions and getting that -- getting those samples out to consumers really drives -- build that familiarity and the trust.
And then with other things like the retail media, again, what we're doing is we're making sure that we show up when people are searching for any relevant keywords. So they're seeing the familiar seeing our brand and becoming familiar with it, adding it to their cart, hopefully, through the different platforms. From a private brand perspective, we are doing things with private brands. We are doing advertising to support that because ultimately, it is our product. So we still do search marketing on certain private brands where it makes sense. I think it is like where we have product at Walmart.
It also depends a lot on the retailer and where they are in their marketing digital ecosystem. So there are some retailers that are more sophisticated than others. So Walmart, for example, very sophisticated in terms of what they're doing to reach consumers and shoppers. And so we're able to work in that space very easily versus there are some other customers that aren't.
We advertise across multiple search retailer media platforms, either their own or with the big retailers or other third-party platforms that have a number of different grocers. So we actually advertise -- I don't know actually the total number, but we're across any customer that has -- is on a platform, we're doing some sort of campaign with them.
So coming out of the [indiscernible] integration, you had a [indiscernible]. Can you just kind of talk about the evolution you have in that [indiscernible] just kind of what you've learned from [indiscernible]?
Yes. So the question is kind of what's the evolution of the M&A playbook. So the first is, I borrowed with pride the work I did for 5 years before at Mondelez. So I promised you I brought my M&A playbook with me. The -- there was great learnings. Actually, we're doing it right now with the NetSuite integration. So when we did [indiscernible] ERP is part of that M&A playbook. It's a very thick playbook. And I'll tell you, we didn't do it right. And that's my fault the first time with Creative Salads. We did not, for one instance, train the trainer enough. We pushed the ERP on to Creative Salads and that's going to work, and it caused a lot of -- it made it more difficult than it was. So actually, then I'll combine the 2.
The other thing is we didn't have an expert -- an ERP expert to running the implementation. We have now John who leads all of our IT efforts. He's done ERP implementation is about 850,000 times. We have -- and Anthony and I and Skip and others meet with John every week now. There's Gantt charts upon Gantt charts around all the training that we're doing, actually on the steering committee are the folks from Crown right because we're not doing it to them, we're doing it with them. So that's one example.
There's not enough time in the day to talk about all the things that I failed at. But every time we do it, it's going to -- it gets better and better. But I can give you [indiscernible].
Just 1 more question, another question from Ryan for Chris. Chris is the winner today. How much white space remains with these top 10 customers?
How much white space with the top 10 customers? It would be almost impossible for me to put a number on that. So I would say where we're -- when you think about Walmart and 8 items in there, that's a lot of items for them to allow to be in by one supplier in that deli space. So I would say it's more about growing the velocity of the items that we put in there, making sure we get a good rotation of new items, things like that in there. When you get to some of our customers, we may only have 3 or 2 items in that white space gets very, very large.
I'll give you an example. We've got a customer who will be a top 10 customer that the very next meeting I have is with them. They have 5 items branded today and they want to expand that by a significant number, and we've just gotten started. So when you start looking at that, you go I don't know it could be 2x white space with our top 10. It could be 5x in some cases and others might be approaching a little bit of maturity when you think about just SKU count.
But -- so I know that's not a good answer. [indiscernible] all you guys in your roles, right, you want to hear a definitive number. It's still a lot of white space. That's what I could certainly put out there.
And Chris, tell me if this makes sense to you, just a couple of metrics, right, that are facts. We know the category [indiscernible] is a $40 billion category, right? Even at $1 billion, what is that? 2.5% -- a 2 share. I mean we used to have a 50 share in the cookie space, like a 2 share is nothing, right? So that's $40 billion, $1 billion is only a 2 share where Chris used to work, multibillion. So it's not unheard of. There are multibillion players, right? [indiscernible]. These are multibillion-dollar players.
So again, I agree with Chris. I know everyone wants a particular number. I don't know how we could do that. But what I could tell you from a triangulation standpoint is there are $1 billion players in our space that still puts you at a pathetically low market share. And again, Chris and team are just getting started.
Question for Anthony. I think you had said mid-teens EBITDA margin. Is there like a revenue number you need to hit in order to get that? And what do you think about the opportunity for incremental margins or contribution margins on [indiscernible] revenue growth?
So obviously...
Please repeat the questions.
So the question was, what's the opportunity to get that EBITDA margin up and keep it in that teens percentage range and what's the lever there. The main lever, I would say, is margin optimization and brings gross margin optimization and bringing that up. So using the levers that we talked about there, looking at promo and marketing. The biggest one always is top line sales. And they have to be profitable sales. We make sure that -- Chris makes sure of that when he's pricing the product out. Those are our 2 biggest levers.
And as we bring in organizations, it's just leverage. The more that you can spread the cost around to more entities into more sales, the higher your EBITDA, your net income is going to go up and your EBITDA is going to go up in turn as well.
Yes. I'd specifically add and Anthony is the boss here. We have been reinvesting all of our profits over the past 3 years into building this team, right? There was no Lauren when I started, right? There was no Skip. There was no Chris. There was no Chris' team, right? You saw Chris' team, which is amazing. We had one salesperson in total when I started.
So every year, you have seen Anthony has done an amazing job. Our SG&A as a percentage has really not gone up. It stays around 20%. That's amazing focus and fortitude when everyone comes to him every day, say, I need more, I need more. We have probably another year or so where we're adding, right? We said this year, I'm done, right? Our leadership team is awesome, right? I don't need to hire anybody else, but we said we're going to build a middle management team this year.
I really think after this year, we're sort of done building the team we need. That means every incremental year, SG&A only goes down, right, as a percentage only goes down. And therefore, EBITDA is one for one, right? It only goes up. So we've been intentional to build the team in the future. Once we have done that, and I think another year we'll be pretty close to done, then every incremental dollar goes up.
So -- and again, I look at you guys as partners. I hope you agree that the investments we're making and you see these people around the room is a good use of our dollars. If I wanted just to take it, right? I don't need to hire anybody. I can make EBITDA go up, but we don't have a strong foundation and then what's the sense of that. So I hope you guys agree with the investments.
Just to put a finer point on that, I think the mid-teens number [indiscernible] many of us were not expected for next year. So because you've previously talked about mid-teens like an aspiration like once we scale -- so by putting mid-teens out there [indiscernible].
I think we said to make sure we'd look at it. I think we said we'd end [indiscernible].
Yes. It's going to glide. It's not going to start at that point, definitely.
[indiscernible] year in the mid-teens.
Okay. So not mid-teens for the full FY '27? I'm just asking because it's financial targets for FY '27 [indiscernible].
Yes, I would love to say we could go back and take a look. Again, I think we're going to end -- we're going to go through the year with mid-teens. [indiscernible] I'm happy for you guys [indiscernible] say, again, all I do for the past 3 years is under promise and over deliver. So I'm happy to say we will -- we'll be leaving the year in the mid-teens and then over deliver [indiscernible].
[indiscernible].
Chris, the question is for the customers that we're not in, do they give us a reason? Sorry, well, the customers were not in, why are we not in them?
It's not so much pushback as it is just the bureaucracy of a large business. I can't explain this enough because came from that side of the world through most of my career. And it's challenging to get the first step. It's always the first item. One of them out there, we've been to, I've personally leverage relationships, and we've shown a ton of samples and it's always [indiscernible] products the best. We're excited. We'll get back to you type of thing. So for me, it's going to be persistent. And oftentimes, it's right timing. Some of the big customers that we still get out there that we could get, they've had a lot of distraction in the last year or 2. So you can kind of put the math together a little bit who I might be talking about. And in that distraction tends to be people that move physicians and suddenly have different responsibilities. And we've seen ourselves get caught up in that a little bit.
So a little bit excuse oriented there, but to me, it's still just persistence. It's not that we don't have the right items. It's not that our items aren't great. We have gotten pushback in the past on pricing to some degree. And that is just more us staying -- I don't mind that. I'll lose the sale every time if it's simply going to be about price because I'm going to get another opportunity on that one when they get disappointed by a lesser product.
Yes, totally agree.
[indiscernible] focusing on the NAE chicken product. Is that -- are you pushing that as a replacement for the rest of chicken products of some retailers? Or is that kind of incremental to the products you already have [indiscernible]?
Chris, the question is, are we doing NAE for -- I know the question [indiscernible] the answer. But are we doing NAE all customers? Or is it just for new items or transitioning all of our items?
We're transitioning all our items to NAE. It's just who we're going to be. It's just like the way we choose to flame grill and our chicken and do it to the highest level of quality. That's how we're viewing NAE. It's just who we are. So it doesn't require a new -- if you're thinking about it this way, it's a new item where we have to resell into the customer? No, absolutely not. It's -- hey, you're buying our chicken, by the way, it's all NAE now.
Right. There's nothing bad like in the sense that, again, we don't have to change the SKU number or it's one of those things. If it's not -- if it doesn't say NAE but we accidentally make it NAE, that's absolutely fine. So it's only a benefit. There are some customers that will buy because it is NAE. There are some customers that will want it more. Equally, there are some customers that don't care as much, but we know it's better, and we're still going to upsell it.
[indiscernible], how much more expensive is an NAE chicken versus [indiscernible]?
So the question how much more expensive is NAE chicken? So I could answer that in 2 ways. One, it's roughly [indiscernible] $0.15 necessarily more. I mean you could check the same information on the [indiscernible] stuff is what it is in the market if you buy in the spot. Because of our scale now because we're able to contract in advance that helped us a lot.
[indiscernible] everyday item that is more [indiscernible] '27. What does that mean to [indiscernible]?
Since it's a softball question because I don't give Chris the hard ones, I'll answer that. The question is, what is Costco and NAE -- sorry, what is Costco every day item? That means carry the one, it's exact -- every day. It's in Costco. So Costco traditionally is a rotation program, right, the treasure hunt mentality, most items at Costco actually rotate in and out. There is a very small subset -- how Chris said already the club channel has a smaller set of items, assortments. There's even fewer that are in every day item and Chris' team and Scott got us everyday status at Costco and [indiscernible].
[indiscernible]
No, just the beef balls -- jumbo beef meatballs.
[indiscernible] just like the revenue opportunity [indiscernible] you've gone from 1 to 10 to 30. And then that is you have every day [indiscernible].
I think it's great. I'm very optimistic [indiscernible].
Yes, back to the M&A topic, you obviously focus on adding incremental customers [indiscernible], all that good stuff. I'm curious if you could dive deeper to the capabilities aspect. Where is your priority there? I guess maybe asked differently, where do you feel like you're underdeveloped today that's kind of necessary to help your business scale over time?
Yes. So the question is from an M&A perspective, you keep talking about capabilities, Adam, what the heck are you talking about? So it really could be anything. So when I think about M&A, since here when I tell you, I don't care about the revenue and the profit that just comes along with it. But if they could get me into a customer, right, [indiscernible] and the customer that shall not be named, we tried forever. We couldn't even get a call return to us. Magically, they called Chris, the next week. Getting into a new customer is pretty awesome, getting into new items that maybe we don't make today, right? New technology, whether it's HPP or MAP technology, those are examples where -- are there things that we can learn from, from other customers, stuff like Skip was talking about industrial engineering like capabilities, I would love -- I would be thrilled to have someone even more hard core on the data than I am, right, on the way they track fixed, the way they measure throughput, how do we learn from one plant to the other.
Skip does an amazing job on his leadership team that we're one team any given day, a product could be anywhere that means you better be sharing with each other because we're all family here on, what are you learning? There's a super cool guy [indiscernible] that -- he's hard core, right? He's tracking throughput every single day. He sees me in his excel sheet, he gets excited or nervous depending on the numbers. But now he's taken on a broader role because, look, if we're doing this in Farmingdale, let's do this in Bayshore also, let's do this East also. And we're sharing that information.
So capabilities to me can be anything that again, we could use across the network. The fact that they -- where do we learn -- I mean, not that it's rocket scientists -- science, but NAE, I guess where we learned that from? Crown. Crown [indiscernible] NAE with everything that we do at Whitemans is NAE. Oh, wait a minute, maybe we should do this broader, maybe customers would be really interested in, maybe this could be a differentiator for USDA. That's why we're looking at M&A. It just so happens that it comes with $56 million at 0.3x revenue very profitable.
[indiscernible] they go into that every day, [indiscernible]?
No, I believe, Chris, for Costco, just the customer and every day item, that's not to say that we couldn't do any sort of promotions or tasting, et cetera, et cetera. Is that correct, Chris?
Oh, yes, that's absolutely correct. We can do other promotions, other rotations. We can still conduct an MDM even on that item. If we -- if they want to do that nationally into some regions that aren't every day.
[indiscernible], like how long -- would you become ever day [indiscernible]?
You're just a hater today, aren't you? [indiscernible] Look, we have to keep up great quality and great service. I have no doubt, and I would actively do it myself. Yes, if we actually have a credit product or we don't actually deliver, I'm sure they could take away every day status. And I would take it away myself because I want to keep getting better, like Chris mentioned, and I think it really was an amazing partnership between Chris and Skip. Yes, we sold it in. But at best, that's only 50% of the challenge. Can you actually deliver on it? So I am super proud just like Chris said, right, first you start with GRANDMA-quality products, but what really keeps you is GRANDMA-quality service. That service is sales service, customer service, supply service, et cetera.
[indiscernible] may not have seen outside of Crown [indiscernible]?
Question is anything from a macroeconomic standpoint on the deli space, prepared food space? I would say, if anything, it's only getting better. I truly believe it's really getting accelerated by customers. Customers are seeing it. Customers are investing in more and more linear feet of shelf space -- refrigerated shelf space, one of those things that you just take out the next week, right? And they have to invest in it as well. So I feel great about that. I don't feel great that the economy is not as awesome as it could be for everybody, and that means people aren't going out as much.
Inflation, I'm not happy about this, but inflation is 2x, 4%, right. Away from home inflation is 4%, at home inflation 2.1%. It's 2x. Again, it goes back to the acceleration point. It's getting more expensive to eat out. Again, I'm not happy about that for my 330 million friends in America, but it does help our business.
[indiscernible] M&A transaction in the last [indiscernible]?
Again, it's an interesting dynamic. We're the only publicly traded company out there. It is still a massively fragmented space. It's -- I feel good.
A couple more for you.
If I get past 3:00, I get double pay today.
[indiscernible] What is that -- is that a big deal over the next few years? And like of your product, [indiscernible] is it a pretty small part of the mix? And how should we think about that growing?
So the question is just the opportunities for mapping. I think there's more and more opportunities, right? It increases shelf life I don't know the exact number of our business, but it's going to be a lot. We map a lot in Bayshore, all of our MFOs in East Rutherford are mapped. I'd love to continue to do it. Again, it's a natural way, right? There's just nitrogen gas. It's a natural way to extend shelf life that helps our customers and by helping our customers, that means they're going to buy more from us. So I'd love to do even more of that. We have -- it's pretty cool.
This goes back to your question on capabilities, we took like 400 years when I got here to should we get our first mapping machine, which you guys saw today, right? And then we just fell into Crown and they had 4, that's pretty cool. So there's more opportunity. There's more room, like Skip was saying, you could play soccer [indiscernible] your country, in some of the spaces at Bayshore, we have a lot of room to grow and add more [indiscernible] into, if that's what we chose to.
One other one, Sam's Club. Maybe -- how should we think about this year [indiscernible] so much success there? The momentum feeling good about it, new product addition -- like anything [indiscernible]?
Chris, the question is, hey, what are you doing at Sam's Club?
So Sam's Club is like our other top customers, we're looking for additional SKUs in there. And we've had some things rotate in and out. Sam's Club itself, I want to express a little bit of just caution of all the marvels in one place at some time. So we want to make sure that we keep it a proportional part of our business as well. But we've got a great relationship there.
Our chicken -- so they have a policy. Basically, you can't be as the single supplier relative to what we do there. But -- so there's another supplier in there that supplies grow chicken to them. Our performance is, I don't know, Adam, is it like 3x what the other supplier is. So they love us as far as year-over-year-over-year type of sales. The customer keeps telling us we're the best product. And our sales continue to grow, even sometimes when we try [indiscernible] just to kind of keep -- have it grow a little bit slower, they just grow. So we're in a good spot. We do want to get some -- strategically, I want to get some additional SKUs in there.
Good. What does the PP&E CapEx look like for fiscal year '27?
Yes. So I think Anthony is the boss here, again, roughly, we spend -- again, most importantly, you don't spend anything we don't have. So you could look at our cash flow from operations, and I will tell you roughly how much -- we're not going to spend more than that. Spending 5, 7, definitely not double-digit millions of dollars is more than enough for what we want to do. So I would factor in mid- to high single digits.
Are all of you guys out? Let's see if any other questions. In fact, Well, if that's it, thank you guys so much. I really appreciate everyone making out here listening on the call. Luke and I are always available if there's additional questions, George or anyone else or no one has -- I'm available 24/7. But [indiscernible], I am so incredibly proud of this team, and [indiscernible] the only 1/10 of the team. This is what I am proudest of. This is what we have built that is not going away. And really excited to share with you more what we accomplished this year in the years ahead. So thank you, everybody.
MamaMancini`s Holdings Inc — Analyst/Investor Day - Mama's Creations, Inc.
MamaMancini`s Holdings Inc — Q3 2026 Earnings Call
1. Management Discussion
[Audio Gap] factors discussed from time to time in the company's 10-K and other documents which the company files with the U.S. Securities and Exchange Commission. In addition, such statements could be affected by risks and uncertainties related to factors beyond the company's control. Matters that may cause actual results to differ materially from those in the forward-looking statements include, among other factors, the loss of key management personnel, availability of capital and any major litigation regarding the company.
In addition, throughout today's call, the company may refer to adjusted EBITDA, a non-GAAP financial measure, which it believes provides helpful information to investors about the performance of the business on an ongoing basis. Reconciliation of adjusted EBITDA to its most directly comparable GAAP financial measure is included in today's earnings press release is available on the Mama's Creations' website under the Investors tab. And finally, this conference call contains time-sensitive information that reflects management's best analysis only as of the date and time of this conference call. The company does not undertake any obligation to publicly update or revise any forward-looking statements to reflect future events, information or circumstances that arise in the date of this conference call.
At this time, I'd like to turn the call over to the Chairman and CEO, Adam a Michaels. Adam, the floor is yours.
Thank you, Luke, and thank you to everyone for joining us today. I'd like to welcome you to our third quarter fiscal '26 financial results conference call. This was a transformational quarter for Mama's, one where the business continues to scale, our retail momentum accelerated and we took a major step forward in our long-term strategy with the addition of the Bayshore facility through the recent acquisition of Crown One.
Our performance this quarter reflects both the strength of demand for high-quality deli prepared foods and the work our teams have done to build a modern, scalable, highly efficient platform. Revenue growth again outpaced the category, accelerating our market share gains, supported by balanced geographic expansion, disciplined trade and marketing promotion investments and new wins across multiple channels. Even in a macro environment where consumers remain selective, our value proposition continues to resonate, grandma quality food at the right price ready when they are.
I would like to start with our recent acquired facility in Bayshore, New York, because while many think the acquisition announcement is the finish line for us, just like in a triathlon, it's just the first leg, and we are already thinking ahead to the next phase of integration. And I could tell you, we're off to a tremendous start, passing and picking off competitors left and right.
To start, this Bayshore team is exceptional. Andy has unleashed an incredibly strong management team. This team is eager to win and the tools, resources and colleagues shared amongst East Rutherford and Farmingdale are creating a powerhouse team. culture must never be underestimated. And now that Bayshore is back home with its food manufacturing colleagues and their work is core to the Mama's organization, Bayshore is reborn.
Our newly acquired facility in Bayshore brings a recently upgraded USDA facility, automated and artisan production capabilities and a reputation for grandma quality items that fit squarely within our brand promise. It also opens the door to a customer set that historically has been difficult to access. The proximity of their facility to our Farmingdale facility gives us a structural advantage similar grills, joint training and shared playbooks, which allow us to move quickly on procurement, labor alignment and SKU rationalization.
Three short months, I am proud to report that 100% of Bayshore's procurement is firmly centralized. This means we're leveraging our volume across all 3 facilities driving specification alignment and inventory management. For example, leveraging Mama's scale, we were able to reduce Bayshore beef costs double digits in the first month alone. If that is not exciting enough, we've already realized our 1 plant 3 location strategy, transitioning some East Rutherford and some Farmingdale production to Bayshore unlocking capacity, reducing overtime and increasing absorption across our network.
Thanks to [indiscernible] and his team in 3 short months, you can no longer see where 1 plant begins in the other ends. We are 1 plant, delivering on our shared one-stop shop strategy. The team is already working through even more synergy capture opportunities, and we expect to lift Bayshore's gross margin towards our historical corporate range over the next year. But stepping back, they immediately strengthened our category position and scale that accelerates our path towards long-term $1 billion revenue ambition. I'm appreciative of the Bayshore team's commitment to our vision and thankful for our new teammates.
Turning to consumer trends. The grocery deli is becoming one of the most important battlegrounds in modern food service. Consumers aren't choosing between brands inside the restaurant channel. They're choosing between the restaurant channel and the grocery prepared food set. Even major restaurant operators like Chipotle noted on their most recent earnings calls that they're not losing guests to other chains. They're losing trips to grocery and food at-home occasions. That dynamic directly benefits us. Industry data shows that the share of shoppers replacing a restaurant meal with deli prepared foods has more than doubled since 2017.
Consumers want speed, value, freshness and the ability to shop for the rest of the household at the same time. Fully cooked meats grew 4.8% over the past year. Chicken remains the top performer in the category, and the overall retail food service segment has grown to over $52 billion. These are the exact spaces where moms competes and wins. Operationally, we continue to execute against our 4 strategy and strategic pillars: Cost, controls, culture and catapult. On cost, our logistics and procurement teams again delivered measurable improvements with freight down another 30 basis points versus prior year, driven by denser freight better material planning, lowering our transportation expenses.
Impressive work by Anthony and his team has taken advantage of lower chicken commodity prices in the quarter capturing below-market spot eyes and marrying it with raise increased trimming execution. While we know this won't last forever, these opportunities highlight our agility and how quickly we can react when the market shifts. As we plan for fiscal '27, Bayshore's chicken needs will nearly double our overall chicken volume demand, which positions us to negotiate stronger supplier partnerships and unlock better unit economics. I'm excited to share with you today that we're in final negotiations with our commodity suppliers to lock in agreements for calendar '26. This will add much appreciated stability to our supply chain allowing Skip to better manage its costs and will allow Chris to more effectively manage his pricing strategies.
Under controls, the work Alberto is doing to build new capabilities around demand and supply planning are creating massive dividends. The visibility is improving our customer service levels, production efficiency and most importantly, informing our fiscal '27 planning.
For example, [indiscernible] of this demand visibility, we've been able to increase our chicken throughput by nearly 40% versus prior year, while reducing over time by over 400 basis points. What gets measured, gets improved. It's not just a mantra in our organization. It's how each of our 600 associates work every single day, regardless of which of our 3 facilities we are in. I also must thank John and his IT team for making the Bayshore transition seamless.
We didn't miss a beat and the work he will be doing over the next 6 months in partnership with Andy and his team will allow us to move to 1 ERP system, adding even more real-time insights and analysis into our business. On culture, I honestly am not sure what to highlight because everything we do starts with culture. [indiscernible] her team were there at 5:00 a.m. on Tuesday morning after Labor Day to welcome our new Bayshore colleagues. Not even sure she left that building for that first week, ensuring our new colleagues had their forms filled out, payroll transitioned, benefits updated and most importantly, had their new Mama's swag.
A week later, magically, everyone was a new Mama's employee, and we had only lost 1 employee at his choosing. In all of my years doing M&A, I think this was the smoothest transition yet. Thank you, Abby, Claudia Candy and to the Farmingdale employees who rolled up their sleeves before their day job to ensure our Bayshore employees felt welcome. Another culture moment to highlight is the successful transition of our company from a make-to-order to a make-to-stock organization.
This means with Skip's guidance, we have now created inventory stock of our highest velocity items, resulting in higher service levels for our customers and lower overtime for our operations. because we're anticipating our customers' needs. This would not be possible without the cross-functional alignment across sales, manufacturing, logistics and finance. This is just one more example how this organization has evolved from a subscale Northeast meat ball company 3 years ago into a national one-stop shop deli solution with the foundation to support anything our customers need. Oh, and did I mention our first ever battle of the bridges, where our New York employees took on our New Jersey employees at soccer, sorry, football.
Let's just say that I personally won as everyone made it into the factory, Monday morning, safe and sound. I'll take the win. In the new year, while I will not be able to speak to the look of their play, I can guarantee you that they will be decked out in new Mama's Kit. And on Catapult, which reflects our purposeful and profitable growth our teams delivered another quarter of market share gaining momentum. In Q3, we exceeded our goal of adding not 1 but 2 Tier 1 national retailers. The first is Target where we have confirmed 2 branded sleeve items to begin shipping in February with the stage rollout to 1,995 stores and additional items in the final setup ages for later distribution.
In Food Lion, another major national retailer, we are entering 1,100 stores this month with 2 new branded chicken items as well as rolling out 3 branded sleeves starting at 400 stores. This is a huge testament to Chris and his team after years of tastings, packaging optimization and hand cramping paperwork. Congrats to Peter for getting us over the finish line. These wins reflect both the credibility of our brand and the demand from retailers for turnkey deli-prepared solutions that drive traffic to their stores and save on labor.
The club channel was another bit spot. Thanks to Scott after a successful 5 region rotation of our branded [indiscernible] chicken meatballs in Q3, our first national Costco MVM and with branded beef meatballs hit in Q4 and is already creating a noticeable lift in trial and brand awareness. Thanks to Eric and his East Rutherford team our production is ahead of schedule, creating confidence that we can deliver whatever Costco needs whenever and wherever they need it.
Costco continues to be one of our strongest strategic partners, and the MVM confirms their confidence in our ability to execute at a national scale. We look forward to reporting Q4 results, which will reflect the revenue from this MVM. Marketing continues to play a meaningful role in amplifying this momentum. From digital programs and club to influencer-driven activation in SAMs and strategic partnerships with Amazon Fresh and Instacart, we're building a modern consumer-facing brand. that meets shoppers where they are, where they already are online, on mobile and inside the store. With the successful rollout of our new technology-enabled meals for one or MFOs and paninis at Publix.
Lauren and her team took the opportunity to leverage social, digital and in-person marketing execution to amplify the launch. But Publix was just 1 example. Retail and social support delivered over 24 million impressions in Q3 and a double-digit return on advertising spend. Our digital media is not only attracting new consumers but also creating fomo with our retail buyers and prospective buyers in the industry as our teenage boys would say, sorry, not sorry.
Finally, while our focus remains on executing Bayshore integration and supporting organic growth, we continue to evaluate additional opportunities that fit our disciplined acquisition framework. Fair price, strategic alignment, operational synergy and high confidence in integration. With our strengthened balance sheet, the right systems in place and a deeper team we have the ability to act when the right opportunities emerge. In summary, Q3 showed the strength of our operating model, the resiliency of our consumer demand for deli prepared foods and the early impact of the Bayshore acquisition.
Our retail wins, club momentum and expanding capabilities give us a clear runway for profitable growth heading into the next fiscal year and beyond. I am incredibly proud and appreciative of our team and look forward to updating you on our progress in the quarters ahead. I'd now like to turn the call over to Anthony Gruber, our Chief Financial Officer, to walk through some key financial details from the third quarter fiscal '26. Anthony?
Thank you, Adam. Moving to the financial results. Revenue for the third quarter of fiscal 2026 increased 50% to $47.3 million as compared to $31.5 million in the same year ago quarter. The increase was largely attributable to the acquisition of Crown One as well as robust double-digit growth in the legacy business on a pre-acquisition basis.
Year-to-date, our organic growth remains at 20%. Gross profit increased 56.6% to $11.1 million or 23.6% of total revenues in the third quarter of fiscal 2026 as compared to $7.1 million or 22.6% of total revenues in the same year-ago quarter. The increases in gross margin rate were primarily attributable to operational efficiency, improvements across the organization in addition to tremendous success in managing our raw chicken prices partially offset by beef commodity headwinds and the addition of lower-margin Crown on sales, which the company expects to bring in line with the corporate average in the mid-20% range over the next year. As a reminder, all of this is inclusive of rightsizing our trade promotion investments when our margins are achieved and the funds are available. Year-to-date, our trade rate sits over 3%.
This is nearly $2.5 million ahead of prior year and even more effective returns. From a marketing perspective, year-to-date, our spend is at 2%, nearly $1 million ahead of prior year. Combined, this is nearly a $6.5 million year-to-date investment in our future, and we are already seeing the fruits of our labor.
We remain vigilant in managing the magnitude and ROI of our trade and marketing spend and see it as a critical tool to achieve our ambitions. Operating expenses totaled $10.3 million in the third quarter of fiscal 2026 as compared to $6.6 million in the same year ago quarter. As a percentage of revenue, operating expenses increased in the third quarter of fiscal 2026 to 21.8% from 20.8%.
Operating expenses in the third quarter were impacted by the recent acquisition of Crown One Enterprises as well as $1 million in nonrecurring transaction expenses tied to the aforementioned acquisition. Excluding the aforementioned transaction related expenses, our OpEx as a percent of revenues would remain below 20%. Net income for the third quarter of fiscal 2026 increased 31.7% to $0.5 million or $0.01 per diluted share as compared to net income of $0.4 million or $0.01 per diluted share in the same year ago quarter.
Third quarter net income totaled 1.1% of revenue as compared to 1.3% in the same year ago. As a reminder, the third quarter of fiscal 2026 net income included the impact of $1 million of costs associated with the acquisition of Crown One Enterprises. Adjusted EBITDA, a non-GAAP measure, increased 118% and to $3.8 million for the third quarter of fiscal 2026 as compared to $1.7 million in the same year ago quarter.
Cash and cash equivalents as of October 31, 2025, and grew to $18.1 million as compared to $7.2 million as of January 31, 2025, primarily driven by improved profitability, ongoing working capital optimization and the private placement completed concurrent with the acquisition of Crown One. As of October 31, 2025, total debt stood at $6.4 million as compared to $5.1 million as of January 31, 2025.
As we clearly demonstrated this robust balance sheet proactively prepares us pursue whatever organic or inorganic growth opportunities may come our way. This completes my prepared comments. Now before we begin our question-and-answer session, I'd like to turn the call back to Adam for some closing remarks. Adam?
Thank you, Anthony. As we look across the business, exiting Q3, the platform is operating with more precision, higher throughput and a stronger growth engine than at any point since I joined Mama's. Bayshore is already adding meaningful production depth and giving us access to premium customers with premiums we historically couldn't reach. Our focus from here is straightforward, Elevate Bayshore's margin profile integrate their workflows into our system quickly and cleanly and unlock the synergy opportunities that come with having 3 facilities operating as one coordinated network.
This is the same disciplined approach we used when we shaped Mamas in late 2022, and the proximity of the Bayshore facility makes execution even more efficient. Our teams know exactly what to do and in what order, align processes, stabilize labor, optimize procurement and accelerate cross-selling. The opportunity set is significant, and we're moving with urgency. While our leadership ensures we take every opportunity to celebrate both the large and small wins with our team internally it is always great to be recognized externally. In Q3, Forbes recognized us as one of the most successful small-cap companies in 2026.
Time recognized us as one of America's growth leaders in 2026. And locally, we are a finalist in NJ Biz 2025 Business of the Year. I am so happy others are recognizing the hard work our 600 associates do every day to deliver for our customers and delight our consumers. Confidence across that organization is high. The consumer shift towards deli prepared foods is accelerating. Our customer pipeline is expanding with Tier 1 retailers and our operational backbone is built to support materially more volume. We are entering the next phase of our growth with momentum, commitment and a clear line of sight into the value we could create.
With that, Luke, let's open the line for questions. Thank you
[Operator Instructions] Our first question comes from Brian Holland with D.A. Davidson.
2. Question Answer
Congratulations on the strong quarter. I wanted to hit on, I guess, maybe first off, obviously, you highlighted the incremental wins at Target Food line. That's fantastic. Anything you can share on the AI front progress that you've made this quarter?
Yes. Thanks, Brian, and really the credit goes to the team. Yes, Chris is doing an incredible job. So I think I've shared with you before Chris' goals for the year and his team is AIC driven. So you're seeing more and more items at each customer. So for instance, Publix, we've traditionally had some meal products. We just got 2 new pennies in New items we've had traditionally at BJ's. We've had proteins. We've now just got new, I guess, nonprotein, so we got these really great sweet potatoes and a [indiscernible] salad. Two new wins at Fresh Market with actually these cool honey time carats and the sweet potatoes. So yes, it's absolutely the first thing. Actually, Chris and I, every time we have our one-on-one every week, it starts with our first goal, which is driving AIC. Our second goal, which is driving velocities, and we talk about what trade programs he's doing in partnership with Lauren with marketing programs they're doing. So velocity is number two. And actually, a distant third is ACV. And I've shared with everyone before. That's because I'm efficient or maybe I'm just cheap. And it is just way the ROI is way higher on getting another item into a store that's already getting a truck delivered or investing in velocities where the product is already there. is harder in the [indiscernible] sorry, it's not harder, but it takes longer. At times, if we don't have any relationship with that customer, you brought up just the great work that Chris and his team did with Target. Look, it took a while. That took probably a year, food line a little shorter, but we get a new item into Publix, we could do it in a week a new item into a new customer that we haven't had in the past, it could take a year. So AIC is #1 when we talk about things. So hopefully, that adds some color.
I appreciate that color. Maybe just tipping into Costco, this MVM goes into full swing, I believe, later this month. obviously, important period kind of in front of that from a sell-through standpoint. I think you made some reference to maybe some things that you're actively doing to drive awareness and visibility. Just curious what you're seeing from a understandably qualitatively, you don't want to isolate the customer. I appreciate that. But just just even qualitatively, any read on sell-through in front of MVM and maybe specifically what initiatives. You can or are executing to build that awareness and visibility in front of the MVM, which is obviously a huge amplifier.
So on Costco, so a couple of things. One, it's actually already shipping. It's been shipping for a few weeks now. You're correct that you will get the MVM, the booklet, I think in a couple of weeks, something my wife and I so that's our weekend activity when we get that MVM, the book. So that's going to happen at the end of the month, and that's when the discount is going to be. But we are in the "right now in the sense of the product is selling nicely already. So that's the first part. The second part, it's the great work that Lauren is doing. I've shared in the past, we amplify on Instacart. So Costco is all over Instacart. It gets great awareness. We do programming on Instacart, and we see great results. Actually, I shared some last quarter, a lot of the customers that we're getting on Instacart are actually new to the brand. So Instacart gives us that type of data. So things we're doing there. On other sites, we're doing a great job and great partnership with Walmart. We invest behind on their search and on their website. Walmart does a great job getting more and more. You guys listen to the calls, I'm sure getting more stuff through their digital Well, guess what, they're actually helping us by amplifying that. Same thing we're doing on public. There's a programming that Lauren does that actually is pretty cool. It's like proximity as you're driving down as job road or whoever. My parents will be proud, I remember that. But there seems to be a Publix on every street in Florida. As you're driving through, you'll actually get text on, hey, why don't you stop in. what we talk about a lot and the team makes fun of me, I don't leave anything to chance, right? So when we get a new item in, what levers can we pull to accelerate that hang tags, things at the point of sale. So yes, we're doing all things like that when new items come in. We absolutely do not just hope it does well. We definitely chum the orders.
That's great. I want to be -- I could go in a bunch of different directions. But I'll just -- I'll nail it on the one more question. Just a sense, you mentioned locking in chicken for calendar 26 are getting close to that. Any sense even directionally where you're kind of locking in at what levels relative to '25? I understand the sole purpose of this is not to get necessarily the lowest price, but it's more so about drive visibility. But so just interesting with the direction that chicken is moving. You've got pricing in and obviously, that was a headwind for you over the last 12 months. Is it just a sense of what kind of benefit that can provide to you looking out to '26?
Yes. So there's probably 3 things that I'd love to talk about, and I'm glad you bring it up. So the first one is the power -- again, there's just so many benefits from the most recent acquisition with Crown, but 1 of the 100 is that it literally doubled our chicken needs and that brought us to another level with who we're reaching out to and who's interested in selling us chicken. Remember, when we first started, it was $1 million, right? It's nothing like a little bit of chicken now. We're literally talking about tens of millions of pounds of chicken every year. And Anthony [indiscernible] is doing an incredible job. So the first thing is we're getting better looks. People want to work with us, and we're getting better pricing from our scale. Second thing is chicken is better now. It's not going to last forever. We're all aware of that. But it's good timing, and we're seeing we're seeing some positive pricing relative to what we had to deal with this year. As a reminder, and you've been following all of this, this is the second worst year for chicken prices after the year after COVID. The average price for the year is going to be the second highest it's ever been on record. So it's great to see that the numbers are getting better. The third, and I do want to actually save some of this until our Investor Day in February, but what's really wonderful is the Crown business actually gave us a different way to think about our business. And as much as we've been grandma quality, which we always have, we're thinking about being even more premium. And Chris' past experience helps us think about where we want to be when we grow up of sorts. And I think that there's some exciting news that we're looking to share to become even more grandma quality, but let's hold that to the investor today.
Our next question comes from Eric Lauriers with Craig-Hallum.
Congrats on yet another impressive quarter here. So 1 of the things I wanted to touch on was the planned SKU rationalization of some Crown products. Just wondering if you could shed some more color on essentially, I mean, what inning you're in, in terms of identifying which SKUs to rationalize and [indiscernible] of actually working through those inventories and I'd be able to just provide a little bit more color on the SKUs that you are rationalizing if you are, presumably, they all do not meet your margin requirements. So wondering if there's any customer product type or geographic concentrations to be aware of?
Yes. Thanks, Eric. So I think we're doing -- so we've started that. We've had meetings about that. That's work that Chris and Lauren are leading. This wasn't the first thing we want to do, right? So first, we want to understand we wanted Chris to have those meetings with those customers. He's actually already had face-to-face meetings already with 2 of our top 3 new customers. And the first meeting wasn't about, hey, here are the things I'm taking away from you. So we knew that the SKU rationalization was probably secondary to a couple of other things. All the work that Skip's doing. We don't need to rationalize the SKUs, if Skip's able to turn everything around and COGS go down because we could optimize how we produce it. So what I can tell you is the team's already had meetings. They've started to put that list together. And again, the intention, I wish every product was wildly profitable wildly high enough in volume to justify it, right? Everyone knows MOQ, minimum order quantities. So the bias is not to rationalize just so we could share with investors that we've cut SKUs. But the team is absolutely clear. It's all about gross margin, right? We have to be around a year from now, right? So we need to have the right margin profile. And Chris and Lauren are all over it. So they understand everything, all the products. We're putting it together. The Major team is doing an incredible job helping us accelerate some of it. So we've started on it, but it's -- we wanted -- it was very intentional that we weren't going to do anything until January because Chris wanted to understand all the products, all the customers, meet with all the customers, and then we'll start that in January. So on track.
All right. That's all very helpful. I appreciate all that color there and makes sense to me. Just last one for me. It's a bit of a kind of conceptual question. Just wondering how you're thinking about trade promotion, I guess, target levels over the next year or so. Just wondering how the Crown integration may or may not impact near-term trade promotion levels?
Yes. So a couple of things. So the first one is, as a reminder, most, if not all, of the Crown's products are private label. So they have a very either very low to negligible Anthony Gruber would tell me minimis trade rate. So that would, on a percentage basis might lower the number overall. That's not to say that's initially I still am very bullish. I always tell Chris, but Chris is the ultimate boss. I want to invest, A, we have it; and two, it's all about growing the velocity and getting us some new customers through trial I would tell you that I still want to push it up, if I were to -- I was really happy, probably Q1, I think Q1, we were north of like 6%. Maybe that was a little high. Then we went down to like 3 and 4 over the past couple of quarters. I'd love it a little bit higher, but I leave that completely to Chris on -- is the ROI as high as it could be. Remember -- sorry, I probably should take something back and say, it's not about how much trade spend. It's how do you get efficient and high ROI trade spend. And that is the lens from which we use. But I will continue to push Chris and Nick on his team to find high ROI trade spend. And then equally, I'd say the same thing with Lauren and her team on marketing spend. the roads, like I said double digits, it's incredible some of the things that Lauren and Jessica are doing to get some great ROASs return on advertising spend. So I'll continue to push the team, but it has to be high ROI.
Our next question comes from George Kelly with ROTH Capital Partners.
And congrats on a nice quarter. So a few for you. First, it looks like stripping out Crown, organic growth was close to 20% in the quarter. I'm curious if you could give the breakdown between volume and pricing.
Yes, super proud of that as well. So about 80%. So actually, it was about 80% of it was volume driven. So while it's kind of funny, I don't know which one I want to see more. I think it's the right level, but I was super proud of getting the right pricing. This is about 20% price driven. That's important. You see, right? It's not about getting a lot. It's about maintaining our gross margin. We have been speaking and I'm very thrilled to speak to you about lower chicken prices. But equally, we all understand because everyone reads the paper every morning, beef prices are through the roof, right, up 50%, the worst heard in 73 years. That has been creating real headwinds for us. So Chris has done a great job, has great partnerships with our customers to share the data, right? We have both actuals, and we actually have third-party forecasted data, and it's collaborative. We share with our customers. We don't want any more gross margin, right? We just need to maintain what we have. And that means that we have to strategically and targeted raise prices when commodities get too high. So I really like that on that 20 range. But then equally, [indiscernible] another CPG company that's growing 80% in volume. I mean it's just pretty awesome the work we're doing. And again, going back to those 3 tenants that Chris is leading on getting more items into every store, getting our velocities higher. You guys read all the time what's happening in the deli prepared set. -- and getting into new stores like you saw with Target and Food Lion and others.
Okay. Okay. That's great. And then next question for me. Adam, you mentioned in your prepared remarks that you're transitioning to a make-to-stock organization. I was wondering if you could give a little more context on the progress there. And I guess just as background, like how much growth were you kind of leaving on the table because you weren't sort of fully on shelf for availability wasn't always there? And as you embark on that? Do you feel like your inventory at retail is now in a good place? Or should we anticipate there being a few quarters of retail inventory fill as you execute on that?
Yes. So first, there's no -- I'm not sure inventory fill. So from a customer perspective, they're pulling normally. They're seeing no difference. The difference is the fact that we always have supply for them. Our service levels are perfect or near perfect. So -- very excited about this idea of make to stock. So we have great partnerships, third-party logistics. For instance, I'll give you, for instance, [indiscernible] 100 -- nearly 100% of everything that's going out in Costco was prebuilt. Eric and his team [indiscernible] did just an amazing job. So what that means is any time Costco needs anything, it's there, no matter what. If they need extra accidentally, it's there, no matter what. I would tell you, when I first started 3 years ago, I don't think we left anything on the table per se because quite honestly, we just didn't have the demand, right? If I have someone to blame for this, it's Chris and his amazing sales team for just doing so well that there's just constant demand and pull in new items. So I think this is a logical evolution of our company, right? My days at Mondelez, PepsiCo, they didn't -- we didn't wait for someone to order some Oreos for us, for us to then start to produce them, right? Everything was a make to stock. So yes, no, I think this is the logical next step. We're doing exceptionally well. It provides better results for our customers, like I told you, in service levels. But honestly, it makes -- it's better for us because we're not rushing. We're not doing triple over time 8 days a week because we've fallen behind. Now we're able to do it with lower overtime and better service levels. So yes, so I'm loving it. The goal is for all of our major items with multiple customers, right? So the idea there is you don't get stuck with it. And great work that Skip and his team are doing constantly, I see. You guys know I look at everything, all day Sunday and I get a report from Eric every -- actually a couple of times a week, but I review it in detail every Sunday on every single item that we're building in stock, looking at the velocities, looking at the movements and and the team gets loved notes on Sunday on if something is a little slower than I would have expected.
Okay. Okay. And then last question for me is on gross margin. Just trying to think through the next few quarters. With respect to, can you give Crown's gross margin in 3Q? And then you talked about it reaching that kind of mid-20% range over the next year. Is that going to be a linear ramp? Or how should we sort of map that out? And then secondarily, the legacy business. Curious if you can give any of your expectations just on next quarter or 2 and high level for fiscal year '27. And that's all I had.
So remember, while obviously, we have 3 plans, I'm not telling you, I'm not looking at those 3 plans. There is so much and I'm proud of this. Everything melds together. So I've given you an example that we're buying one -- when we're buying from a procurement perspective for oil, we make one order of oil and then we distribute it across the 3 facilities or equally, there are items now that are made in multiple facilities. So it's hard -- not hard. It's less relevant to look at individual -- the gross margin is this. I will tell you, obviously, we look at everything. And of course, we knew from the acquisition, of course, we knew that the Bayshore legacy business had a lower margin we're seeing everything pick up. When I look at whatever SKU [indiscernible] meatballs that are in multiple locations I could see that, that number is rising week-to-week and other Sunday activity is looking at our top 25 SKUs the weekly margins, and I'm seeing those move appropriately. So we will get to, like I committed to by the -- definitely by the end of next year, I think I said 12 to 18 months. We -- you won't know the difference between Bayshore margins from Farmingdale's margins from East Rutherfords margins. And we're on track to do it. I would argue ahead of where I expected. So that's what's happening with Bayshore. Obviously, if you know that from the legacy business, the base numbers are lower, and you see where our margins are now, you could see that our legacy businesses as clearly, the math, even to my son's a data analytics now at [indiscernible] give them props. Even he could tell you that, well, one number is lower and we're moving up, the legacy business must be quite a bit higher. So we are definitely seeing our legacy business move up. That's a function of great production and efficiency that skips doing commodities, chicken commodities helping us with a little bit of headwinds from beef, but we are seeing a much healthier business today than we were early this year.
Our next question comes from Ryan Meyers with Lake Street Capital.
Congratulations on the strong quarter. Just kind of curious, obviously, better-than-expected gross margins even with the Crown integration. So as you guys have owned this business now for a couple of months, I mean, do you think this integration is going better than expected, as expected? Because it seems like on the surface here, things are continuing to trend very, very favorably and positive with the acquisition.
Yes. No. And again, Ryan, that's a testament to the team, both the Bayshore team and their openness and eagerness, like that's the word. They are truly eager. They are excited. So many of the folks from Bayshore have come to East Rutherford, how many tons of people to Farmingdale, it's just truly from a cultural perspective, that is exceeding massively exceeding expectations, and I'm so appreciative of it. Production wise, we moved faster than I expected. So thanks to skipping team on cross producing items in multiple locations, exceeded expectations on the procurement and how quickly Alberto was able to centralize everything. So I'm really happy with it. has everything been absolutely perfect No. I'm not sure which ones yet, but I'm sure there's something that hasn't been perfect. I go there every single week. I really enjoy it a lot. Skips there multiple times a week. And no, I'm just really -- the fact that it's so close to the Farmingdale facility just really unlocks a lot. Actually, more than I would have expected. So yes, overall, I would definitely tell you exceeding expectations.
Yes. That's great to hear. And then congrats on the 2 new customer wins. So just curious, as you think about the 2,000 or so stores at target and then roughly 1,100 of [indiscernible], is there additional capacity that you think you guys need to bring online? Or do you feel like you, for the most part, will be able to unlock this capacity through the now 3 facilities that you guys have?
Well, so that's why there was a little bit of clairvoyance there, right? So the fact that we got 42,000 square feet of space accidentally of course, with the Bayshore acquisition. That's a huge unlock. So they were probably roughly like, I don't know, let's call it, 50%. And there is in the earlier question from Eric on there'll be some SKU rationalization, right? We want to make sure -- it's not just about producing, right? My team knows that they don't get credit for revenue, they get credit for profitable revenue. So there'll be some SKU rationalization that will give us even more space. And then as I've shared with many of you, we just took over in our New Jersey facility we're in a building that had 2 wall in the middle, we actually took over that other space. So very excited. Skip, -- actually we brought in some new folks, Shane and Carlos to help us expand and that's actually already happening and will start early next year. That will unlock additional capacity that almost doubles our New Jersey facility. So between the expanded New Jersey facility and the building out the Bayshore facility. I feel good that we can double our business just with that. Most importantly, it's -- I don't stop, maybe I took a day or 2 off, but already back in the market looking at what the next acquisition could be, which gives us more space.
Our next question comes from Anthony Vendetti with Maxim Group.
I was wondering if you could give us a count now with the target rollout to it. How many stores are you in at this point today? And then from the Crown acquisition, what capacity is that at right now? And has that enabled you to roll out, like how much of that is coming from -- the Target [indiscernible] food line, how much is that coming from your existing facilities versus the new Crown facility. And then as the last question, Costco, what's the opportunity to continue to build out that relationship.
So the first question, I can get back to you on the exact number if we're at 12 now. And once we get to full rollout at Target and Food Lion. That's another 3. So I don't know, let's call it, 15,000, but I'm happy to get back to you on the actual number. And again, it's going to take some time to do the full rollout just as well as we did with Walmart. I am very patient when it comes to executing with excellence. So I'm not in any rush to get to every single store on the first day. So that's to your first question. Second question, maybe I won't accept the premise of your question in the sense that we're all family, all 3 facilities. We don't talk about legacy old this or that. That was a great learning I had from my Mondelez days where 10 years later, people are still talking about being [indiscernible] battery versus [indiscernible]. We are one team today the acquisition happened. Lauren did an amazing job and put all the posters and everything up, we're 1 team. So to your point, to your question, yes, Food Lion, I believe, is coming out of the Bayshore facility Target is likely coming out of the New Jersey facility, their branded sleeves. So Skip looks every day at how do we be optimal. We make sure when we speak to customers and since the acquisition, we're getting sort of certified. So there are some customers that want to know exactly which facility they're coming out of and they'll do audits. So they've already started to do that in Bayshore. Our strategy is our product can be made in any 1 of our 3 facilities any day of the week. So it's where do we optimize? Obviously, Bayshore right this minute has more capacity, has more space, right, 42,000 square feet versus about 25,000 square feet in Farmingdale, about 25,000 square feet in New Jersey. So we're definitely pushing volume there. But we look at it as 1 network. So it's wherever the best place to produce it at any given day, and it actually might change from day to day. You had a third question on Costco? Yes. I forgot. I apologize. What was the question on Costco.
Just what's the opportunity to continue to expand that relationship there? Would you say you're at about 50% saturation there or where are you in terms of the ability to make that a more lucrative relationship? And how much runway do you have there?
Yes. I love -- actually, all my partnerships, all of our partnerships with our customers, some of them are different, but they're all great. talking about a question that I could not even begin to answer. The opportunity is huge with Costco. And every day that goes by, thanks to Scott and and the team, great relationships now every day with all 8 of the regions. So just remember, just 3 years ago, when Anthony and I started, we had a relationship with just one, right, with just the Northeast. And maybe we do on rotation all year long, just once with the Northeast. Now every day, we're having conversations, Remember, we could -- and it's not one or the other. We actually meet all the time with individual regions, and we might decide to do a rotation with just one equally. We have similar conversations on how do we do national buys, which we did last year, MVMs, digital MVMs, which we did earlier this year or MVMs, which we're doing now. So I love the opportunity. Why? Great customer great consumers, right? There are type of consumers, quality, grandma quality. They're growing. So I think it's truly limitless with Costco. And thanks to Scott and the team, we have a great partnership with them that we're speaking to them all the time with tons of items, right? We just did -- we're doing the [indiscernible] [indiscernible] meat balls. Remember, last year, we did the sauce. We did meatloaf. We did the sausage and peppers. They're having tons of conversations now about some new items. So yes, I think that there is a lot of opportunity. I'm very bullish on club and mass. And I like the [indiscernible] of the world. for next year. I understand what's happening in the marketplace. I know consumers per streams are tight. And I think the winners are going to be in this -- the club and mass channel. We have great relationships.
Any other questions, operator?
This now concludes our question-and-answer session. I would like to turn the call back over to Adam Michaels for closing comments.
Thank you, operator, and thank you again to each of you for joining us today. This quarter showed what this organization can do when every part of the engine is aligned. Our sales and marketing teams continue to open meaningful new doors. Our operations team is scaling efficiently. And with discipline in our finance -- with discipline and our finance and people teams are building the foundation required for long-term profitable growth. The early progress with Bayshore is already strengthening our platform, expanding our capabilities and increasing our access to high-value customers with major retail wins coming online, growing momentum in club and mass and a unified network that can support significantly higher volume, we are entering the next phase of our growth with confidence.
As always, we appreciate our investors' continued support and look forward to updating you on our execution in the quarters to come. Finally, as we head into the eve of the holiday season, I want to thank you -- I want to say thank you to the men and women of Mama's that make me so proud to be called their teammate. Happy holidays to all.
Ladies and gentlemen, thank you for your participation. This now concludes today's conference. Please disconnect your lines, and have a wonderful day.
MamaMancini`s Holdings Inc — Q2 2026 Earnings Call
1. Management Discussion
Greetings, and welcome to the Mama's Creations' Second Quarter Fiscal 2026 Earnings Conference Call. [Operator Instructions] It is now my pleasure to introduce your host, Luke Zimmerman. Thank you. You may begin.
Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to Mama's Creations' Second Quarter Fiscal 2026 Earnings Conference Call. During today's presentation, all parties would be in a listen only mode. Following this presentation, the conference will be open for questions. This conference is being recorded today, Monday, September 8, 2025, and the earnings press release accompanying this conference call was issued after the market closed today. On our call today is Mama's Creation's Chairman and CEO, Adam Michaels; and CFO, Anthony Gruber. Before we get started, I'll read a disclaimer about forward-looking statements.
The conference call may contain, in addition to historical information, forward-looking statements within the meaning of federal securities laws regarding Mama's Creations. Forward-looking statements include, but are not limited to, statements that express the company's intentions, beliefs, expectations, strategies, predictions or any other statements relating to the future earnings, activities, events or conditions. These statements are based on current expectations, estimates and projections about the company's business based in part on assumptions made by management.
These statements are not guarantees of future performance and involve risks, uncertainties, assumptions that are difficult to predict. Therefore, actual outcomes and results may and are likely to differ materially from what is expressed or forecasted in the forward-looking statements due to numerous factors discussed from time to time in the company's 10-K and other documents, which the company files with the U.S. Securities and Exchange Commission. In addition, such statements could be affected by risks and uncertainties related to factors beyond the company's control.
Matters that may cause actual results to differ materially from those in the forward-looking statements include, among other factors, the loss of key management personnel, availability of capital and any major litigation regarding the company. In addition, throughout today's call, the company may refer to adjusted EBITDA, a non-GAAP financial measure, which it believes provides helpful information to investors about the performance of the business on an ongoing basis.
A reconciliation of adjusted EBITDA to its most directly comparable GAAP financial measure is included in today's earnings release, which is available on the Mama's Creations website under the Investors tab. And finally, this conference call contains time-sensitive information that reflects management's best analysis only as of the date and time of this conference call. The company does not undertake any obligation to publicly update or revise any forward-looking statements to reflect future events, information or circumstances that arise after the date of this conference call. At this time, I'd like to turn the call over to Chairman and CEO, Adam Michaels. Adam, the floor is yours.
Thank you, Luke, and thank you to everyone for joining us today. I'd like to welcome you to our second quarter fiscal '26 financial results conference call. Our fiscal second quarter saw broad-based momentum. Revenue growth outpaced the category. We intelligently and judiciously leaned into high ROI trade investment and saw continued geographic balance with volume-led growth supported by new branded placements and incremental doors.
We also worked collaboratively with our retail partners and implemented targeted pricing by early Q2, while operational work in chicken improved yields, increased throughput and optimized labor, helping to manage commodity and inflationary headwinds. I'd also like to call out that we achieved these gains despite a continued challenging macroeconomic environment for our consumers, highlighting the resiliency, reliability and relevance of our value-oriented high-quality deli prepared foods offerings across any macroeconomic environment.
Most notably, we recently announced our acquisition of Crown I Enterprises from Sysco Corporation, a full-service manufacturer of value-added meats and ready-to-eat meals. As competitors, we had long admired their commitment to Grandma Quality products, and I would like to personally welcome Andy and his entire team to the Mama's Creations family. Together, I know we can accomplish great things. Crown I was originally part of J. Kings Food Service and was acquired by Sysco in 2019.
It operates a recently upgraded and expanded 42,000-square-foot USDA-certified facility in Bay Shore, New York, just 10 miles from our Farmingdale location, operating much of the same grilling equipment we do in Farmingdale. Its customer roster includes hard to break into retailers with huge cultural followings where we haven't penetrated.
This $17.5 million all-cash opportunistic acquisition brings meaningful synergies to our core business, while bolting on an attractive business at 0.3x their fiscal '25 revenue, fully financed through a private placement with institutional investors and further supported by a long-term credit facility with our existing commercial banking partner, M&T Bank, which further supports future opportunities that may come our way. Strategically, Crown adds immediate derisked capacity on familiar grill platforms, nearly 200 experienced operators and a culture of Grandma Quality offerings rivaling Mama's.
The plant combines automated and hand-cut portion-controlled proteins with modified atmospheric pressure packaging to extend shelf life, capabilities we can scale across our network. With about $56 million in revenue for the 12 months ending June 30 of this year, Crown I meaningfully advances our path to $1 billion of revenue. The deal is accretive this fiscal year, and we see substantial growth potential with their premium customers and cross-selling opportunities. Crown I adds significant scale and immediate production capacity, especially in chicken to our operation, and we also gained an incredible team as well as management bench strength.
We plan to expand SKU penetration across Crown I's customer base and bring their facility into our network quickly, leveraging our incredible Farmingdale operations team to drive integration given its proximity. Over time, we expect to evolve Crown I's margins closer to our current levels through operational efficiencies, improved throughput, joint chicken purchasing and better coordination of machinery and logistics. Most importantly, the Crown I acquisition following the successful acquisition of Creative Salads and Olive Branch in 2022 and Chef Inspirational Foods in '23 proves once again that our one-stop shop strategy is working.
And with patient searching, prudent diligence and a practical transition, our Mama's family can acquire and integrate businesses at attractive multiples to drive outsized value for our shareholders. Turning to market dynamics. During the first half of fiscal '25, we have seen growth for private label brands continue to outpace national brands. The Private Label Manufacturers Association reported that private brands outpaced national brands by 4x during the 6 months ending June 15. Leading the charge was Refrigerated Products, which recorded the highest sales growth at 13% over the period. This reaffirms our strategy and remains a tailwind for Mama's.
Speaking of Refrigerated Foods, according to new research from the National Frozen & Refrigerated Foods Association, shoppers have a strong and growing connection to the refrigerated section, especially when it comes to healthy, quick meal solutions and everyday family basics. This study discovered that 77% of adults associate refrigerated products with high-quality ingredients and that 70% believe these products support health or wellness goals, another feather in Mama's cap. In addition, protein remains the most sought-after nutrient in American consumers' diets according to results from two recent consumer surveys from the International Food Information Council.
This was the fifth straight year in a row that protein was the top nutrient that most Americans say they're trying to consume. Approximately 80% of consumers reported prioritizing protein intake during a daily meal. High restaurant prices continue to bring consumers back to the grocery store for both savings and variety. The July Consumer Price Index highlighted these trends as away-from-home inflation increased from June to 3.9% over the past 52 weeks, while at-home was down from June to 2.2%, creating almost a 2x variance between away-from-home and at-home inflation over the last 12 months.
These away-from-home price increases provide significant market potential for our deli prepared foods to capture, particularly in recessionary environments where consumers eat out less. Operationally, we executed against our 4 Cs: cost, controls, culture and catapult, and we'll run the same playbook at Crown. The first is cost. Skip and his team have done a tremendous job driving efficiency in our facilities. Freight continues to be a highlight with greater freight line management, fuller trucks and better planning, driving down our costs another 60 basis points from last year and last quarter.
We've created new centers of excellence, starting in logistics, procurement and IT, which allows us to use our scale more effectively. We can't wait to add Crown's muscle to our growing frame. Crown will nearly double our raw chicken needs and early conversations with our suppliers reflect they couldn't be more excited to partner with us for growth and sharing improved costing. One year ago, we only had two chicken grills in Farmingdale. Today, we have six, expertly maintained, skillfully run and eagerly awaiting our sales team to fill them up. The second C is controls. As promised last year, we have successfully implemented the start of our warehouse management system in East Rutherford.
This has provided us unparalleled visibility into our inventories, allowing for reduced waste as well as more agility and higher service levels for our customers. We have also deployed new NetSuite upgrades throughout our network to alert users immediately if cost of raw materials or assembly builds change in cost above a certain threshold. As you hear me say often, what gets measured gets improved. This is just one more example of our strategy coming to life and not just sitting in a PowerPoint deck.
While Crown is already successfully managing their business on an alternative ERP system, we're already planning to bring Crown onto our NetSuite instance early next year to ensure we're optimizing every aspect of our business across all three facilities. As our team knows, our operations mantra is one plant, now three locations. The third C is culture. Abbey and her team recognize that our people are our most important ingredient and have been working to turn jobs into careers. Last month, we announced our first-ever Heritage Mentorship Inaugural Class.
This program is for high-potential associates to match up with a leadership team member over a structured 9-month journey with themes, developmental activities and enrichment experiences rooted in Mama's core values of commit to craftsmanship, honor heritage and nurture relationships to develop this leadership and EQ skills. The best part of being in a fast, profitably growing business is that there are always opportunities to step up and lead. This will become our breeding ground for the leaders of Mama's tomorrow.
While our team is always prepared for the next acquisition, the Crown deal allowed us to break out our M&A people playbook once again and use these repeatable tools to ensure on day 1, our Crown colleagues feel protected, provided for with a sense of purpose in Grandma's house. Culture remains our secret weapon. The final C being catapult speaks for itself. We saw another quarter of 20-plus percent growth, nearly 10x category growth. The capabilities that Chris is building are incredible and part of me thinks we should change catapult to crush.
Most importantly, the sales team is focused on the right things, accelerating the club channel this quarter with new non-protein items at BJ's using the entire white meat chicken breast for paninis at Sam's, chicken meatballs at Costco. We have partnered with our biggest grocery partner to launch four new meals for one, leveraging our new map technology, adding shelf life and reducing labor for Publix. We've also leveraged our map technology to launch new meals for one offline and Amazon Fresh stores as well as online.
We're excited to share that we recently received confirmation that Costco would like to partner with us on our first-ever national multi-vendor mailer in Q4, allowing the entire country to buy the meatballs that got this company started. This was not planned for in the budget, but Chris and Skip are ready for it. Our biggest surprise this year has been what we thought would be a quiet launch of a new panini line, boy, was I wrong. Following our IDDBA event this summer, our paninis exploded and are now in over 2,000 doors, anchored by Sheetz, Sam's Club and Publix, just to name a few.
More importantly, they're beating all velocity expectations, and we're already being asked to expand the door count. All of this excitement makes it that much more impressive that our sales team across Crown and Mama's are already talking about how to accelerate this amazing growth. As a reminder, Crown provides $56 million in revenue in retailers that are largely incremental to our base today while providing meaningful new product cross-selling opportunities, both in their customers and ours. This provides us a baseline of nearly $200 million in run rate sales from which to grow, catapulting us to even closer to our $1 billion goal.
I would be remiss and likely in trouble if I didn't share with my fellow shareholders the incredible work Lauren and her team are doing on the marketing front to capture wins today and strengthen our brand for tomorrow. The stronger our brand, the more we can help our retail partners drive more trips, larger baskets and more profitable sales. Our success in club this quarter didn't come by chance. The Sam's Club influencer campaign drove awareness to the new panini items we launched. The BJ's digital program drove trial and more importantly, repeat levels above historic numbers.
Our Walmart web partnership is seeing double-digit returns on advertising investment, and our Instacart partnership is adding fuel to our Costco beef meatball fire. As I hope you see, we do not leave much to chance, and we don't hope new items succeed. We develop in advance the plans, partnership and promotion to allow our items to explode. Lastly, while organic growth in the Crown I integration remains our clear priority, we continue to keep our eyes open for our next potential M&A opportunity. As we made clear with Crown I, we are disciplined in our approach, seeking targets that enhance our category leadership, expand our capabilities and further scale our operations at a fair price.
With our robust balance sheet and operational infrastructure, we are confident in our ability to successfully integrate Crown over the next year and thereafter, any opportunities that may arise. In closing, the strategic and operational improvements made in the quarter, paired with our acquisition of Crown I have created a stronger, more agile and efficient business platform.
With significant new customer wins coming online in the second half of the year, successful product expansions and continued operational improvements now realized, Mama's is exceptionally well positioned for profitable growth and market share gains throughout fiscal '26 and beyond. I remain incredibly proud of our team's execution, energy and relentless commitment to excellence, and I look forward to sharing our continued progress in the quarters ahead. I'd now like to turn the call over to Anthony Gruber, our Chief Financial Officer, to walk through some key financial details from the second quarter of fiscal '26. Anthony?
Thank you, Adam. Moving to the financial results. Revenue for the second quarter of fiscal '26 increased 24% to $35.2 million as compared to $28.4 million in the same year ago quarter. The increase was largely attributable to volume gains driven by same customer cross-selling of new items, accelerating velocities of existing items and new customer door expansion. Trade spend was prudently managed to drive outsized returns and remain 2x larger than prior year. Targeting pricing actions were successfully negotiated in Q1, implemented in Q2 and now more accurately reflect the current macroeconomic conditions.
Gross profit increased 28% to $8.8 million or 25% of total revenues in the second quarter of fiscal '26 as compared to $6.9 million or 24% of total revenues in the same year ago quarter. The difference in gross margin was primarily attributable to operational efficiency improvements across the organization, partially offset by continued protein commodity headwinds and increased investment in trade. Operating expenses totaled $7.1 million in the second quarter of fiscal '26 as compared to $5.3 million in the same year ago quarter. As a percentage of sales, operating expenses remained within our targeted range in the fiscal second quarter '26 at 20.1% from 18.6% in the same year ago quarter.
Operating expenses in the second quarter benefited from increased operating leverage and ongoing operational efficiency improvements, partially offset by a 75% year-over-year increase in marketing spend, an area of historical underinvestment to help drive repeatable and profitable brand growth. Year-to-date, our high ROI marketing spend has nearly doubled versus prior year. Looking ahead, following the acquisition of Crown I, our revenue run rate stands at approximately $200 million today, and we believe that our normalized gross margin profile, not including major commodity fluctuations will hover in the low 20% range.
This is driven by Crown's lower gross margin profile standing in the mid-teens percentage range, about 10 points short of our historical margin profile at Mama's Creations and we believe that over the next 12 to 18 months, by instilling our operational discipline into Crown's operations and realizing meaningful procurement and throughput cost savings across the enterprise that we can structurally lift our combined gross margin profile from the low 20% range today towards Mama's historical levels in the mid- to high 20% range. As a reminder, all of this is inclusive of rightsizing our trade promotion investments when our margins are achieved, and the funds are available.
In Q2, we knew we had commodity headwinds, and we adjusted accordingly. Trade came in at 2.2%, more than 2x higher than prior year. For the first half of the year, trade is running 3x prior year with over $3 million invested in growing our velocities, brands and retailer partnerships versus less than $1 million last year. We remain vigilant on managing the magnitude and ROI of our trade spend and see it as a critical tool to achieve our ambitions. Net income for the second quarter of fiscal '26 increased to 11% to $1.3 million or $0.03 per diluted share as compared to net income of $1.1 million or $0.03 per diluted share in the same year ago quarter.
Second quarter net income totaled 3.6% of revenue as compared to 4% in the same year ago quarter. Adjusted EBITDA, a non-GAAP measure, increased 18% to $3.3 million for the second quarter of fiscal '26 as compared to $2.7 million in the same year ago quarter. Cash and cash equivalents as of July 31, 2025, grew to $9.4 million as compared to $7.2 million as of January 31, 2025. The increase in cash and cash equivalents was primarily driven by improved profitability and working capital optimization.
As of July 31, 2025, total debt fell to $2.7 million as compared to $6.8 million as of July 31, 2024. As we clearly demonstrated, the robust balance sheet, further supported by a $27.4 million credit facility with M&T Bank proactively prepares us to pursue whatever organic or inorganic growth opportunities may come our way. This completes my prepared comments. Now before we begin our question-and-answer session, I'd like to turn the call back to Adam for some closing remarks. Adam?
Thank you, Anthony. We exited the quarter with a tighter, higher throughput platform, now amplified by Crown's capacity and premium customer access. Our priorities are clear: enhance Crown's margin profile, integrate them quickly and efficiently and drive aggressive synergy realization and cross-selling by helping them to be brilliant at the basics.
This is a playbook not dissimilar from when I first joined Mama's Creations back in late '22 and equally straightforward to implement given their proximity. I could promise you that our entire management team is laser-focused on executing upon this goal. We're approaching escape velocity, well positioned to compound profitable growth as consumers shift to convenient, high-quality deli prepared foods. With that, operator, let's open the line for questions.
[Operator Instructions] Our first question comes from the line of Ryan Meyers with Lake Street Capital Markets.
2. Question Answer
First one for me, just on the gross margins. And I know things will be a little difficult to predict as you guys are integrating the acquisition. But if we think about just the organic Mama's business, do you still feel confident in the gross margin rebound in the second half of the year? Are you may be seeing ongoing chicken commodity headwinds? Are you planning to pull back on trade spend at all? Just how we should be thinking about the Mama's business organically as itself, the gross margins in the second half of the year?
Yes, absolutely. Thanks, Ryan. And before I begin, I just really want to thank the team again. Everyone has done an incredible job operating the business. My partner, Anthony here through the whole M&A process. I really appreciate him. And just a huge thank you to everybody. Directly to your question, yes, we feel really good. If you look at what's happening with chicken, I think there was a little bit of a God smile or something. But if you remember when we had this conversation in the beginning of June at the last call, I told you we hadn't seen chicken prices go down. And literally, the day after our earnings call, it started to go down.
Chicken is literally a full $1 a pound cheaper than it was when I last spoke with you guys. So I feel really good there. Obviously, Skip is doing a great job with his team on continuing to drive efficiency in the process. Our throughput is really impressive. We're seeing now that we have -- well, we have four grills, now we have six, but you're seeing just a lot more throughput, which is really helping us. So yes, from a core business perspective, and Crown will after this call become core. But yes, we feel good with what's happening with chicken. Beef is pulling up a little bit. It's something that we want to keep looking at.
But again, we have contracts in both places. But yes, everything knock wood, is going our way. Chris and his team is doing an incredible job. I mentioned just a minute ago, the first ever Costco national buy that we just got in Q4 that is massive and completely not in budget. So yes, I feel good. Look, we just have to keep doing what we're doing. We've been doing this now for the past 3 years together as a team. And I feel great with how we're doing. And yes, so I feel really good there.
Got it. That's good to know. And then thinking about the $56 million in revenue that the Crown acquisition will add, is that growing? Is it expected to continue to grow? Is there any kind of SKU rationalization or channel rationalization that you need to do? I know you did some of that when you first joined Mama's, there was some stuff you guys walked away from. But just kind of help us understand where that Crown business is from a revenue standpoint and kind of anything we should be understanding with that.
Yes. It's really interesting. I'm a recovering former management consultant and the sort of inside joke when we used to go to each of our clients, we'd speak to the CEO. And the first thing the CEO would say is, guys, you've never seen this before. We're really special. We're really different. You can't use what you've done in the past. And for 7, 8, however, long years I did it, we ran the same playbook. I got to honestly tell you guys, we're cheating, full stop. We're cheating. We've done this as a leadership team with the Creative Salads acquisition, Anthony Morello, helped us, right? And Anthony is still here.
We've done this once before. We're going to do it all over again. It's literally 10 miles away using the same equipment. So everything you just mentioned, absolutely, we're going to look and look at the business, right size the business. We're not making any decisions right now, right? Chris is the boss with Andy, who leads Crown. We're going to meet with each of our customers. We're super excited. We bought the business for our customers. So we're going to have conversations and see how we could help them more, right?
That's the whole power we have with the business to share more, to have more capacity for them. So I think we're going to do a -- I feel very comfortable from a revenue side of the house. Yes, if there are SKUs that aren't selling at all, but we keep all of the raw materials in the back and we throw it out every 3 months, yes, we're going to probably stop that. We're going to look at what we have. Hey, we're going to look at do we need two meat loaves? Do we need two meatballs, right? Which one is better? We'll share with our customer both. If they like the one, they have, great.
If not, wow, I just improved the quality for your product and actually, from what we're seeing, lower your cost. From an operations perspective, Skip is already, he's been there the whole time. Poor Tammy, his wife, he's been in Bay Shore and looking at our products. We just added two more grills. That means that when we used to have to push hard and pay for overtime in Farmingdale, we don't have to do that anymore, right? Because we have two more grills. We have additional capacity.
This 42,000 square feet is -- yes, 42,000 square feet. It is twice the size of both of our other two facilities. This is a big space for us to allow a lot of efficiencies. So I think the so what for all of this is we are all super excited. We are super patient. Anyone that you guys know me; I'm not rushing after anything. We're going to take a very patient approach, speak to our customers first, right? This is a Grandma Quality business and learn together and together see where we could help each other across, right? One plant, three facilities, three locations. And I think that's where we're going to drive a lot of synergies.
Our next question comes from the line of Eric Des Lauriers with Craig-Hallum Capital Group.
Congrats on another very strong quarter here. First question for me on the Costco news. Congrats there as well. I was wondering if you could just kind of recap the progress you've made penetrating Costco over the past 2 years and then expand on the importance of the MVM here. Do you see this as a step closer towards everyday product status? Or is this kind of a nice to have with Costco? And how impactful could everyday product status be at Costco?
Yes. Thanks, Eric. And I'm super proud Scott gets a lot of credit from our sales team. Remember, when I started here, Scott and I, we had about $570,000, I think, of sales, one product, one region. All of last year, we got into all eight regions at different times. We had about $10 million of sales all of last year. If you remember, we had the digital MVM in Q1, we hit $10 million just in Q1. So I explained in the past, it's an evolution. You get one item, you do exceptionally well in one region, you get more regions.
As you do exceptionally well, you get all regions, you get a national buy. You do exceptionally well, you get a digital MVM, right? That's what we did in Q1. You do exceptionally well, you get a national MVM, a print MVM. Every house in America, if they have a Costco membership, they're going to see Mama Mancini's meatballs in their brochure in the holiday season, another brilliant move by Scott for timing. He thinks it's pretty good to be -- have a national buy during the holidays. It's awesome.
And to your point, if we do exceptionally well, Grandma Quality, great service, the next step is the national -- the everyday item. I just gave you some numbers there. It keeps -- what we used to do in a year, we did in a quarter, could you only imagine what the national MVM is going to look like? And can you only imagine if we have an everyday item. So as long as you stay Grandma Quality, great service, Costco is a great partner for us. And you see that over the 3 years that we've been partnering since I've been here.
That's helpful. I appreciate that. And yes, very nice progress over the past 2 years, looking forward to the years to come here. Switching gears to Crown a little bit. So you called out their map capabilities. You also kind of highlighted yours in your prepared remarks as well. Just wondering if you could help us understand the differences between Crown's map capabilities and yours. What are they bringing to the table? Is it just -- is it more scale? Are there some differences in their capabilities compared to yours? If you could just flesh that out, that would be helpful.
Yes, there are a couple of things. And I really am so excited. I've been sort of privately over the past many months during the acquisition. Obviously, I had a chance to work with Andy during the M&A process. I obviously couldn't speak to the folks on the line every day. But I've already started to last Sunday. And what I'm excited about, I love the talent there. I love the people. Again, we're buying people. We're buying capabilities. These are really excited folks that I think we're seeing, and Abbey and Skip could speak better to this, but I think they found their home, right? Sysco is an amazing company. We could only aspire to reach those levels. They're a distributor, right?
That is their expertise, and that's where they're exceptional at. They're not a manufacturer, right? Actually, this Crown business was the only manufacturing element of their business. So I think that in these few -- this week or so that we've been able to speak to our new colleagues, I think they're really excited to be back to being core to the business, and that's what's very exciting. You asked very specifically, yes, they have more -- they actually have more equipment than we do, full stop. And that's great, and that gives us more space. But the other thing it does is they have more experience than we do.
We've had this map technology now for months. They've been doing it for years. So remember, this is not a one-way street. This is not us telling them what to do, right? This is them teaching us. That's why you get brilliant people, not to tell them what to do, it's for them to tell you what to do. So I am really excited for -- I'm already seeing people moving around the three plants. We have a very permeable across the three plants. I want to see a lot of learnings. So it's not just the equipment that they have and capacity that they have, but it's actually they know how to do things better than we do in some areas, and I want to learn from that.
So I mentioned earlier, the Publix is doing really well, four new items at Publix with the map technology, that's better for them, right? That reduces Publix swell, which means they want to buy from us more. We help them out. We actually got two new paninis in there as well. So yes, things are going really well. Amazon Fresh is another one that's starting with our map item. So I feel great. I could sleep a little better at night, knowing that we have more capacity if things really accelerate and Chris and his team do their job, which they are. So yes, hopefully, that's helpful.
Yes. No, that was very helpful. And then just last one for me. Anthony, you touched on this in your prepared remarks, but just wondering if you could expand how your trade promotion plans or targets this year might change with Crown expecting to weigh on gross margins for the next 4 to 6 quarters.
Well, we always look at the gross margin and balance it out with our marketing spends. So we try and optimize there where we -- if there's a quarter where commodity prices are up, we're going to tap the brakes on the marketing spend and make sure to kind of bolster our margin up. It's a seesaw. It's a little bit of feel all the time of what's out in the market, how much we're paying for input and then what we could do as far as a customer standpoint and growing the customer base.
We'll always look at that margin number and offset it basically with the marketing spend. If we're seeing a whole lot more margin than we anticipated, we're going to use some of those dollars to drive velocities on the top line by spending marketing dollars. If the margins and things are going very well for us right now, knock wood, as Adam said, chicken prices are a whole dollar less than what they've been. So we have some opportunities now. The MVM will be one of those opportunities.
Yes. I agree with what Anthony said and just one other part with Crown. Crown is predominantly a private label business. So their trade rate is significantly lower. So what that does is understanding just the numerator and denominator, it's going to -- we don't have to spend as much in some of those customers that sort of want a fixed price. So yes, so we'll see.
And I think the other thing that's important is, hopefully, you've seen this. You saw it in Q1. You saw it in Q2 now. Chris and his team do a very good job at -- it's a lever that they're able to move up and down fluidly. And the partnership that Chris and Anthony have together weekly. We see what the numbers are. And if we need to pull back, we need to pull forward. So this is -- it's a very flexible tool that Anthony and Chris use together.
That's very helpful. If I could just kind of press that a little bit further. So I think previously, the goal was high 20% gross margins. And when it exceeds that, you would increase trade promotion. Should we kind of think of that high 20s is now being moved down to the low 20s where, say, you guys are looking at a quarter coming up where maybe you're at, just call it, 22% gross margin or something lower than you previously would. Maybe that's a quarter that you would typically not spend a whole lot of trade promotion, but with this kind of "new normal" is that -- could that be a level where we could see more trade promotion than we would if it was Mama's stand-alone gross margin?
So I really think, and you've seen we've been together for a few years now. We have to see how the business goes. So we've shown that we could easily move it forward and back. We -- again, I mentioned earlier, I don't want to rush this integration. That's where you fail. I want to start, see where we are. We have the patience. As Anthony said, with chicken coming down, that actually gives us more than we had in Q2. Remember, Q2 started in May. That was the absolute peak of chicken prices. So you can only imagine what Q2 would have looked like if chicken wasn't -- I mean, I think the day of our earnings call, chicken was, I think, $2.83, something like that, a pound.
Now it's like $1.70 a pound. So again, we're in it for the long haul. I think that we're going to be patient, see where it is. Our core business will help the Crown business get up to a higher number. And again, it's really important to remember, again, this is exactly what we did at Creative Salads. When we started, right, 3 years ago, Creative Salads was exactly was below the Mama's average. A year later, we had Creative Salads above the Mama's average. So this is a team that did it. It's the same team. Anthony, myself, Lauren, right? And now we have Skip and Chris. So I think we're going to do even better than we did with the Creative Salads acquisition and the movement right up on gross margin.
Our next question comes from the line of George Kelly with ROTH Capital Partners.
To start, I was curious if you could be more specific just on the sort of potential revenue capacity out of Crown's manufacturing facility? And is there a lot of CapEx that you anticipate investing to get you up to whatever that potential capacity number is?
Yes. And actually, I'll take the second question -- the second part first because it's so cool, and this is just another awesome factor. So this is one of -- this is the most recently enhanced expanded business. So to Sysco's credit, I think they put something like $6 million into this facility over the past couple of years. So it is actually one of the more automated, definitely the more enhanced temp-controlled and it's, again, the biggest facility. We really have to put nothing into this facility. This is the cool part of this acquisition. The net book value of the fixed assets, this is a great -- we acquired a lot of great assets. So that's really good.
Other than maintenance that we always put in; we do not expect any major CapEx whatsoever to the Crown business. If anything, we're actually going to take some stuff that maybe is underutilized and bring it to Farmingdale, to East Rutherford, where we were going to buy something completely new and now, we don't have to. I would argue from a system perspective, it's like a net negative CapEx, if that's such a thing. So that's to your second part. I think the first part on the revenue potential, this is -- again, remember the Creative Salads acquisition. We actually went down a little bit because we saw some businesses -- there's some part.
They have a legacy street business as well, similar to how Creative Salads does. That allows us to drive more efficiency with our trucks, right? We have the trucks, and we do the route rides. But I could imagine, yes, there will be some stuff that we're going to speak to customers. It's a collaborative conversation. We have to show -- we'll show them, this is what it costs. We have to hit a certain margin profile. And we might decide similar to what happened when I got here at Mama Mancini's, similar to how when we were at Creative Salads, there may be some business that we both collaboratively choose not to continue.
That's going to lower it and then it shoots up again, right? We went down in Creative Salads and now we're 3x where we started. So I think there's space there. We could easily across the three facilities, double our business from what we have today. So actually, I was speaking to Skip earlier today, and I was looking for at least a candy, a Hershey's Kisses or something now that I got him 42,000 additional square feet. I did not get the casserole I was looking for, but it's okay. But yes, I feel good with -- we really -- I'm breathing significantly better now from an operational standpoint now that we have this facility, a lot more space now.
Okay. Excellent. And just to -- so you said you think you could double your revenue productivity. So roughly a $200 million business now you think you could double that number with the three properties?
Yes. And again, it's not just the physical space and as Skip talks about, bolted down capacity, it's also the efficiency that we have. So I could speak to you more about Crown. Crown really does work two shifts. They don't work a third shift. They don't work the weekends, right? Now that we have the two additional grills at -- in Farmingdale, we really don't work weekends. So there's a lot more space. There's also more efficiency on how we do things. I showed you before, we didn't just increase our throughput in Farmingdale because we got two more grills.
We're doing things more efficiently. So that's another place. So it's not just the physical space, not just the equipment, it's the fact that we're being more efficient at what we do. I can speak to you all day about what we're doing in East Rutherford. The automation that we have in East Rutherford now, I told you about the map machine, the way we are doing with the spiral oven. So yes, I feel very good. I -- I'm sure I've used this before. I don't play tennis, my son does.
But a little bit of a game with Skip and Chris, right? The goal is Skip should be calling Chris saying, hey, I have all this excess capacity. What are you doing? Chris should be calling Skip saying, hey, you want me to slow down if you can't keep up, and I constantly want them to play back and forth very -- was it Sinner, Alcaraz, right? That's -- Chris and Skip could figure out which one of them they are. But yes, I feel really good now with the capacity we have.
Okay. That's great. And then just one other question for me. You spoke -- congrats, the news you offered on Costco and the 4Q promotion, that seems like a big deal. I was hoping that you could talk a little about the other big club customer, Sam's. And I think you mentioned in the press release the panini has performed well. Maybe if you could give a little more detail just on the performance of that SKU. And what are your expectations in the back half? Are there potentially additional products coming or anything else you can flag for the back half?
Yes, I love it. So it's actually one of my favorite products. It's a chicken pesto panini. And yes, it's doing well. They expanded the door count. It was a rotation that went through the summer, and they're still ordering. So I'm excited for the teams to chat and see what we could do more of. But again, these paninis are really picking up. I would very much love to continue to partner with Sam's on the panini. I told you we got two paninis into Publix. Sheetz has three paninis. So the paninis are doing exceptionally well.
And again, I'll just keep going back to, I feel great that Crown has additional space. Again, the way we do things is it doesn't have to be -- look, paninis we're only making in one place, no other place gets to do it. It gives us huge flexibility on our production. So paninis are doing well. Sam's is doing well. The chicken, the stuffed pepper mix, really proud and appreciate the strong legacy, long partnership we've had with Sam's. It's great.
Our next question comes from the line of Nick Sherwood with Maxim LLC.
My first question is, can you expand a little bit more on the success you had at Walmart in the quarter from the marketing perspective and sort of how that relationship has evolved and where you see that going through the rest of the year?
Yes. Another great partnership. Remember, we had a whopping total of 0 sales this time last year, right? This is something that happened towards the end in Q4. Another great chicken product of ours. It's -- this four-count is doing exceptionally well. I think -- I'm going to make this number up, but I think when we started, I think there was maybe 200 or 400 doors, something along those lines. I think we're up to 1,800, almost 2,000 doors. And again, it's not just the individual item, Chris and Scott and team were down there just a month or so ago. I love the partnerships that we create. It is not, it is not, it is not transactional.
How do we work together? What new items are you looking for? What are consumers looking for? How do we work together on it? So I love it. And I'm really -- I've said this to folks before, I really believe there's just a lot of momentum because of our consumers, right, our 330 million friends across America. Things are tough for them. People are spending more of their dollars in club and mass. And that's where our teams are trying to bring the best products, promotions to be where the consumer is going to be. So really good, great partnership with Walmart as well.
Appreciate the detail. And then kind of switching gears, Sheetz is your first convenience channel customer. Can you kind of talk about the experience and expanding in that channel and where you see yourself growing more? Is that a near-term priority? Or are you more focused on club and mass and then maybe really getting into convenience as something further in the future?
Yes. Look, if we're going to be the one-stop shop in deli, we want to win everywhere. So it's absolutely a focus of ours. There are other convenience channels. If you remember, when we really started this a year or so ago, the first step was getting into all the distributors, right? Because that's how you get into the convenience channel. It's sort of a chicken or egg. The distributors don't want you unless you have a C-store customer. The C-stores won't buy from you unless you have distributors that could actually sell there. So in the beginning, it was very hard. What's amazing is we're now in all distributors, right, starting with Sysco, right, starting with Dot, starting with KeHE. So we have McLane.
So we have -- we're in all the distributors now. It makes it easier. Every day, Tony or others are getting us into the different C-store banners. Again, we want to go where the consumers are going, and it is tougher now. The convenience channel is by definition for convenience, right? It's not for low cost. But our goal is to meet the needs of our -- of every consumer regardless of where they are. And we're going to create different products, possibly at lower price points to meet their needs in a particular channel. So there's a lot of testing we're doing with some different products that are -- I want to keep to ourselves for now, but that I'm excited about and has some interest from a couple of other C-store banners.
Okay. Perfect. And then my final question is, how does this acquisition affect any of the planned improvements to the East Rutherford facility?
So like I mentioned to you earlier, so first of all, we're absolutely continuing to develop our East Rutherford facility. We've put a bunch of stuff in already. And if you remember last time, we actually more than doubled the space that we have in East Rutherford. So that's not changing. I mentioned earlier, what is changing is, I'll give you a really specific example. we are going to actually spend money on a shredder, right, pulled chicken, shredded chicken. We're going to go out and buy a brand-new machine, takes forever to get, pay top dollar, all these things.
Hey, the Bay Shore facility, the Crown has an extra one. Wow, we can bring it over. Literally just this weekend, we have one of our great products, if you guys -- it's in five regions today at Costco is our cheese stuffed chicken meat balls. Again, one of my son's favorites. And it's really complicated, right? It's a special machine that stuffs the cheese inside, right? You always want to know how they got whatever into the Tootsie Roll Pop. Eric and Ray, Eric runs our East Rutherford facility. Ray runs our Farmingdale facility. We have just a lot of demand.
Eric gave Ray a call, hey, can I borrow one of your stuffing machines? Absolutely, Eric. And we go back and forth every day with our trucks. And now we have three machines here. So hopefully, that's just one example of many, one plant, three locations and now getting a lot of equipment from Crown. There are things that we were going to buy in East Rutherford that were, for all intents and purposes, going to get for free. And that's awesome. So that's one example that, yes, we're absolutely investing in East Rutherford. We're just going to -- Anthony is smiling. We're just going to invest less than we were going to because, oops, we actually have the equipment, which is wonderful.
And we have reached the end of the question-and-answer session. I would like to turn the floor back to CEO, Adam Michaels, for closing remarks.
Thank you, operator, and thank you again to each of you for joining us today. I hope you see that our team is starting to hit our stride. Our sales and marketing teams have the products and relationships needed to accelerate our business. Our operations team has the capacity and know-how to continue to drive meaningful efficiencies throughout our network. Our finance team continues to prove we have the balance sheet management and capital markets expertise to support most any investment that lies ahead.
And most importantly, our people operations team continues to bring in great talent and lift up existing talents to create the Grandma Quality culture critical to our success. [indiscernible] is our new Crown family, which we're integrating with speed and discipline, focusing on growth while maintaining our margin targets and leveraging added capacity and premium customer access to drive a profitable business. Looking ahead, we're positioned to take share as we execute our one-stop shop deli solutions strategy. As always, I appreciate your continued support. Thank you.
And this concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.
Financial data from MamaMancini`s Holdings Inc
Revenue
Revenue is the sum of all sales generated by a company, e.g. for its products or services.
Revenue (TTM) metric explainedDirect Costs
Direct costs are the costs incurred directly in connection with the manufacture of the product or service.
Gross Profit
Gross Profit indicates how much of the revenue remains in the company after deducting direct production costs. If the percentage share of sales is calculated, this is referred to as the gross margin.
Gross Profit metric explainedSelling and Administrative Expenses
Selling, general and administrative expenses (SG&A) include all expenses for marketing and sales as well as the general administration of the company.
Research and Development Expense
Research and development costs (R&D) provide information on how much the company invests in the research and development of its products. The costs are particularly interesting as a percentage of revenue and in comparison to direct competitors.
EBITDA
EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) is the company's earnings before interest, taxes, depreciation and amortization. The EBITDA margin is calculated as a percentage of sales.
Depreciation and Amortization
Depreciation represents reductions in the value of the company's assets (e.g. due to wear and tear on machinery).
EBIT (Operating Income)
EBIT (Earnings Before Interest and Taxes) is the company's profit before interest and taxes, also known as the operating income. The EBIT Margin is calculated as a percentage of sales at
.
Net Profit
Net Profit represents the profit or loss after deduction of all costs.
Net Profit metric explainedStocksGuide Premium
| Apr '26 |
+/-
%
|
||
| Revenue | 189 189 |
47%
47%
100%
|
|
| - Direct Costs | 144 144 |
48%
48%
76%
|
|
| Gross Profit | 45 45 |
45%
45%
24%
|
|
| - Selling and Administrative Expenses | 37 37 |
46%
46%
19%
|
|
| - Research and Development Expense | 0.30 0.30 |
29%
29%
0%
|
|
| EBITDA | 14 14 |
52%
52%
7%
|
|
| - Depreciation and Amortization | 5.56 5.56 |
64%
64%
3%
|
|
| EBIT (Operating Income) EBIT | 8.20 8.20 |
44%
44%
4%
|
|
| Net Profit | 6.11 6.11 |
39%
39%
3%
|
|
In millions USD.
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MamaMancini`s Holdings Inc Stock News
Company Profile
MamaMancini's Holdings, Inc. engages in the marketing of specialty prepared, frozen, and refrigerated foods for sale in retailers. Its products include meatballs with Italian sauce, meatloaf, and Italian entrees as well as beef, turkey, chicken, and pork. The company was founded by Daniel Dougherty and Daniel Mancini on July 22, 2009 and is headquartered in East Rutherford, NJ.
StocksGuide Premium
| Head office | United States |
| CEO | Mr. Michaels |
| Employees | 582 |
| Founded | 2009 |
| Website | mamamancinis.com |


