Mama's Creations Reports Mixed Financial Results for Q3 and Nine Months of Fiscal Year 2024

Mama's Creations, Inc. reported its financial results for the third quarter and the first nine months of fiscal year 2024, revealing a mixed performance in revenue and profitability. For the three months ended October 31, 2024, the company generated net sales of $31.5 million, a 10% increase from $28.6 million in the same period last year. However, net income fell to $410,000, down from $2.0 million in the prior year, primarily due to rising costs of sales and increased operating expenses. For the nine-month period, net sales rose 17.2% to $89.7 million, but net income decreased to $2.1 million from $5.2 million in the previous year.

The company's costs of sales increased significantly, rising 22% to $24.4 million for the quarter, which represented 77% of net sales, compared to 70% in the prior year. This increase was attributed to higher commodity costs, particularly for chicken, and inefficiencies related to construction projects. The gross profit margin declined to 23% from 30% year-over-year. Operating expenses also rose, totaling $6.6 million for the quarter, driven by higher advertising, payroll, and commission expenses, as well as a one-time legal settlement of approximately $900,000.

Strategically, Mama's Creations completed the acquisition of Chef Inspirational Foods, LLC (CIF) in June 2023, which contributed to the company's revenue growth. The integration of CIF is expected to enhance the company's product offerings and market reach. The company continues to diversify its product line, introducing new items such as ready-to-serve meals and single-serve pasta bowls, which are aimed at meeting evolving consumer demands.

Operationally, Mama's Creations reported an increase in customer engagement, with its products now available in over 8,000 grocery and convenience stores nationwide. The company has also focused on improving procurement and manufacturing efficiencies, although these efforts were partially offset by rising commodity prices. As of October 31, 2024, the company had a working capital of approximately $3.2 million, a decrease from $6.9 million at the beginning of the fiscal year, primarily due to a decline in cash and an increase in current liabilities.

Looking ahead, Mama's Creations remains optimistic about its growth trajectory, driven by anticipated revenue increases and ongoing cost management efforts. However, the company acknowledges potential challenges, including market volatility and rising commodity prices, which could impact future profitability. Management believes that its current cash resources will be sufficient to meet operational needs over the next twelve months, although additional funding may be required to support growth initiatives.