Mama’s Creations (NASDAQ:MAMA) reported sharply higher first-quarter fiscal 2027 results, with management pointing to new retail placements, the Crown I acquisition and broader customer growth as the main drivers, even as gross margins were pressured by launch-related costs.
Chairman and CEO Adam L. Michaels said fiscal 2027 “is off to another strong start,” noting that the company grew revenue 50% in the quarter while lapping a year-ago period that included nearly $10 million in revenue from a Costco digital MVM program that did not repeat this year.
New retail items drive growth
CFO Anthony Gruber said revenue growth was primarily due to item expansion at existing customers, the launch of more than a dozen new branded items at major retailers, contribution from the Crown I acquisition and broad-based growth. Michaels said the company launched new branded SKUs at Walmart, Target and Food Lion, along with new launches across three Albertsons divisions, two Paninis items at Weis, two non-protein items at The Fresh Market, and new wins in the convenience and meal kit channel.
Management said many of those new products launched in the middle to end of April, meaning the quarter included much of the upfront cost but limited revenue contribution. In response to an analyst question, Michaels said the company is already seeing improved efficiencies from initial production runs, including a packaging change at Walmart that reduced labeling costs and labor.
Michaels said Walmart performance has been “very pleasantly surprised,” adding that the company’s new chicken items were already in more than 2,000 stores roughly 30 to 45 days after launch. He also said the company continues to pursue its goal of adding at least two new SKUs with each of its top 10 customers.
Gross margin pressured by startup costs
Gross profit increased 35.3% to $12.4 million, but gross margin declined to 23.6% of revenue from 26.1% a year earlier. Gruber said the decline reflected labor and raw material inefficiencies, startup costs related to new packaging technologies and protein form factors, and ongoing integration of the Bayshore facility.
Michaels told analysts that labor and raw material inefficiencies were roughly between $500,000 and less than $1 million. He also said the company intentionally shifted about $500,000 from marketing into trade spending to support launches at retailers including Target, Food Lion and Publix. He said those two factors would have put gross margin “north of 25%,” while describing the spending as intentional support for new launches.
Management reiterated that the company remains on track toward its mid- to high-20% corporate gross margin target as new items move into steady-state production. Michaels cited examples including high-pressure processing technology and modified atmosphere packaging, which he said are being used to address retailer needs around shelf life and labor.
Bayshore integration and capacity remain in focus
Michaels said the Bayshore integration remains a key part of the company’s margin and operating strategy. He said procurement and logistics are now centralized across all three plants, production has been reflowed to improve utilization and reduce overtime, and Bayshore has moved onto the company’s corporate ERP system.
The ERP integration across all three manufacturing facilities was completed during the quarter. Michaels said the unified system now covers procurement, production, inventory and sales, and is already contributing to faster month-end close processes, improved inventory accuracy and more granular cost visibility by line and SKU. He said the company also advanced its warehouse management system and implemented its first transportation management system.
Asked whether any major Bayshore integration work remains, Michaels said the ERP conversion was “the last major hurdle,” while adding that the company will continue to improve operations. He said the Bayshore facility is producing Walmart and Food Lion items and that the acquisition provided a “huge unlock” from a capacity standpoint.
Michaels said the company believes it can roughly double revenue from around $200 million to $400 million with its current and newly expanded space, including the East Rutherford expansion. He added that potential acquisitions remain a focus and that he is looking for companies with manufacturing and distribution capabilities.
Operating leverage and balance sheet
Operating expenses totaled $9.8 million, up from $7.6 million a year earlier. As a percentage of revenue, however, operating expenses declined to 18.5% from 21.6%. Gruber said the improvement reflected operating leverage as the company scales, as well as the decision to shift some marketing investments into trade spending.
Cash and cash equivalents totaled $24.4 million as of April 30, 2026, up from $20 million as of Jan. 31, 2026. Gruber said the increase was driven by improved profitability, operating cash flow generation and working capital optimization. Total debt stood at $5.1 million at quarter-end.
Management said the balance sheet, available credit facilities and cash flow generation position the company to pursue both organic growth and acquisitions.
Management remains confident in organic growth
In response to an analyst question, Michaels said he remains comfortable with double-digit organic growth for the year. He said about 90% of the company’s sales growth in the quarter was volume-driven, with about 10% from pricing.
Michaels also highlighted continued progress with Costco, saying the prior-year $10 million Costco promotional comparison was lapped without incremental Costco programming. He said the Northeast everyday item status secured last year is providing steady-state volume, and that Costco’s San Diego region has decided to take the company’s beef meatballs as an everyday item.
Looking ahead, Michaels said the company’s priorities include optimizing its three-facility network, accelerating retail distribution tied to Walmart and Target ramps, deepening club-channel partnerships with Costco, Sam’s Club and BJ’s, and selectively pursuing accretive acquisitions.
About Mama’s Creations (NASDAQ:MAMA)
Mama’s Creations, Inc engages in the marketing, manufacturing, and distribution of beef meatballs with sauce, turkey meatballs with sauce, beef meat loaf, sausage and peppers, chicken parmesan, and other similar meats and sauces. Its products include beef meatballs, turkey meatballs, stuffed meatballs, lasagna roll ups, retail ready meals, bulk deli, single-size pasta bowls, and packaged refrigerated products. Its brands include MamaMancini’s, Creative Salads, and The Olive Branch. The company was founded by Daniel Dougherty on July 22, 2009 and is headquartered in East Rutherford, NJ.
