Executive Summary
Mamas Creations Inc (MAMA) reported a solid first quarter of fiscal 2026, with revenue up 18% year over year to $35.3 million, driven primarily by volume and expanded customer doors. Gross margin reached 26.1% in the quarter, aided by fixed-price protein contracts that provide margin stability amid commodity volatility, while trade promotions rose to a record 6% of gross revenue. Net income rose 123% to $1.24 million, and EBITDA expanded to $2.83 million as the company benefited from operating leverage and ongoing efficiency improvements. Cash flow from operations totaled $6.0 million, supporting a stronger balance sheet with cash and equivalents of $12.0 million and total debt reduced to $4.6 million, laying a healthy foundation for strategic investments and potential acquisitions. Management outlined a multi-year, four-paceted operating framework (Cost, Controls, Culture, Catapult) and emphasized ongoing margin expansion and brand-building investments (e.g., trade, marketing ROI) to drive next-stage growth while pursuing a national deli solutions platform.
Management also highlighted meaningful operating improvements across chicken trimming, throughput, and yields, with capacity doubling year over year and overtime hours down ~70%. These gains supported higher production efficiency and enable a deliberate ramp in in-house trimming and product expansions. Distribution wins across major retailers (Albertsons, BJโs, Costco, Publix, Lidl, Amazon Fresh, Sheetz) underscore a strategic shift toward a national deli presence. The near-term outlook remains constructive, with management targeting high- to mid-20s gross margins on a normalized basis, trade spend trending toward a 10% of revenue target, and continued robust cash generation. The company also signaled an active, disciplined M&A process with a full pipeline of opportunities, tempered by commodity and macro uncertainties. Overall, the QQ1 2026 results position MAMA to pursue profitable, scalable growth in fiscal 2026 and beyond, while maintaining cash discipline and a vigilant view on margin protection.
Key Performance Indicators
QoQ: -18.20% | YoY:-5.68%
QoQ: -22.69% | YoY:123.69%
QoQ: -17.75% | YoY:122.30%
Key Insights
Revenue: $35.3 million, up 18% YoY; Gross Profit: $9.18 million, up 23.1% YoY; Gross Margin: 26.1% (gross profit as a % of revenue); Operating Income: $1.58 million; Operating Margin: 4.48%; Net Income: $1.24 million; Net Margin: 3.51%; EBITDA: $2.83 million; EBITDA Margin: 8.01%; Diluted EPS: $0.0314; Weighted Avg Diluted Shares: 39.38 million; Cash & Equivalents: $12.01 million; Total Debt: $4.60 million; Net Debt: $0.75 million; Operating Cash Flow: $6.01 million; Free Cash Flow: $5.47 mi...
Financial Highlights
Revenue: $35.3 million, up 18% YoY; Gross Profit: $9.18 million, up 23.1% YoY; Gross Margin: 26.1% (gross profit as a % of revenue); Operating Income: $1.58 million; Operating Margin: 4.48%; Net Income: $1.24 million; Net Margin: 3.51%; EBITDA: $2.83 million; EBITDA Margin: 8.01%; Diluted EPS: $0.0314; Weighted Avg Diluted Shares: 39.38 million; Cash & Equivalents: $12.01 million; Total Debt: $4.60 million; Net Debt: $0.75 million; Operating Cash Flow: $6.01 million; Free Cash Flow: $5.47 million; CapEx: $0.54 million; Current Ratio: ~1.29; ROE (implied from net income and equity): modest due to mid-cap scale but improving balance sheet.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
35.26M |
18.15% |
4.97% |
| Gross Profit |
9.18M |
23.06% |
1.17% |
| Operating Income |
1.58M |
-5.68% |
-18.20% |
| Net Income |
1.24M |
123.69% |
-22.69% |
| EPS |
0.03 |
122.30% |
-17.75% |
Management Commentary
Key themes from management commentary and Q&A:
- Growth momentum and profitability: Revenue up 18% YoY to $35.3M, driven by volume and new product introductions; gross margin 26.1% with record 6% trade promotion supporting brand investments (Adam L. Michaels).
- Margin resilience and hedging: Fixed-price contracts covering more than half of anticipated protein volume for FY2026 provide margin stability amid inflationary pressures (Adam L. Michaels).
- Operational excellence and efficiency gains: Chicken operations capital investments, new grill lines, and tumbling/yield improvements contributing to higher throughput; overtime down ~70%; in-house trimming running 35% ahead of plan (Adam L. Michaels).
- Controls and digital enablement: Warehouse Management System at Farmingdale live, to be deployed at East Rutherford by end of Q2; S&OP implementation in Q2 to boost production efficiency and service levels (Adam L. Michaels).
- Culture and people development: New head of procurement and planning; career pathing initiative for 300+ employees; emphasis on talent and retention (Adam L. Michaels).
- Catapult and distribution wins: New national retailer placements (Albertsons, BJโs, Costco, Publix) and expansion to Lidl, Amazon Fresh, Sheetz; non-commodity SKU expansion to support convenience channels (Adam L. Michaels).
- Marketing ROI and trade discipline: 70% increase in marketing spend with high ROAS (Instacart >6x, Walmart digital double-digit ROAS); trade promotion elevated to 6% of gross revenue, with ROI-focused reinvestment (Adam L. Michaels).
- Financing and liquidity: Robust operating cash flow of $6.0M; cash balance $12.0M; debt reduced to $4.6M; stronger balance sheet enabling potential acquisitions (Anthony Gruber).
- Outlook and M&A: Management reiterated intent to pursue acquisitions in 2026, subject to fit with category leadership and fair pricing; pipeline remains full (Adam L. Michaels).
Revenue grew approximately 18% year over year, to a record $35.3 million, driven more than 90% by volume.
โ Adam L. Michaels
We secured fixed price contracts covering more than half of our anticipated volume protein volume needs for fiscal 2026, providing substantial margin stability in an unpredictable macro environment.
โ Adam L. Michaels
Forward Guidance
Outlook assessment based on QQ1 2026 commentary and ัะฐะบt pattern:
- Revenue trajectory: Maintains double-digit growth trajectory premised on continued market shifts toward deli prepared foods, expanding shelf sets, and elevated distribution across national retailers. Management acknowledges variability in consumer demand and macro conditions but expressed comfort with profitable growth and disciplined pricing actions.
- Margins and trade spend: Normalized gross margin expected to hover in the high-20% range, with trade promotions stepping up toward a target of roughly 10% of revenue. The Q1 framework shows 26.1% gross margin with 6% trade, suggesting room for reinvestment into growth initiatives while preserving target margins as volume scales.
- Commodity and pricing risk: Ongoing commodity volatility remains a risk; management has hedged roughly half of 2026 protein volume with fixed-price contracts to mitigate margin erosion. Pricing actions negotiated in Q1 through May are designed to preserve gross margin targets across product lines.
- Capex and acquisitions: Near-term CapEx is modest; the company intends to deploy capital toward selective acquisitions that enhance category leadership and scale. Expect ongoing investments in plant efficiency (S&OP, warehouse system rollouts) and select automation, balanced against cash flow generation.
- Key factors to monitor: (1) progression of chicken trimming and in-house production mix; (2) effectiveness of trade promotions in driving profitable brand growth; (3) success of Costco MVM promotions and broader club channel activity; (4) execution of M&A opportunities within a disciplined framework; (5) commodity price trends and their impact on gross margin. Overall, the company appears positioned for continued profitable growth in fiscal 2026, contingent on successful execution of its deli-focused strategy and disciplined capital allocation.