Tofutti Brands Reports 28% Decline in Net Sales, Despite Increase in Gross Profit

Tofutti Brands Inc. reported a significant decline in financial performance for the thirteen weeks ended March 29, 2025, with net sales dropping to $1.591 million, a decrease of 28% from $2.212 million in the same period last year. The decline in revenue was primarily attributed to decreased sales of vegan cheese products, which fell to $1.373 million from $1.809 million, and frozen desserts, which decreased to $218,000 from $403,000. The company cited increased competition in the vegan cheese market and uncertainty surrounding proposed tariffs as factors that negatively impacted sales, particularly affecting its two largest domestic customers.

Despite the drop in sales, Tofutti Brands experienced an increase in gross profit, which rose to $589,000 from $474,000, resulting in a gross profit margin of 37%, up from 21% in the prior year. This improvement was largely due to price increases implemented at the end of 2024 and a significant reduction in freight out expenses, which decreased by 34% to $109,000. Operating expenses, however, remained high, totaling $750,772, leading to a net loss of $162,000, an improvement from the $303,000 loss reported in the previous year.

Operationally, Tofutti Brands continues to manage its costs effectively, with selling expenses increasing slightly by 1% to $217,000, while marketing expenses decreased by 10% to $121,000. The company also reported a slight increase in product development costs, reflecting ongoing investments in innovation. General and administrative expenses decreased by 4% to $368,000, primarily due to a reduction in stock option expenses as all outstanding options became fully vested by the end of 2024.

As of March 29, 2025, Tofutti Brands had approximately $609,000 in cash and working capital of $2.738 million, compared to $462,000 and $2.893 million, respectively, at the end of the previous fiscal year. The company reported net cash provided by operating activities of $148,000, a significant turnaround from the $482,000 used in the same period last year. Management believes that existing cash reserves and expected cash flows will be sufficient to support operations over the next twelve months.

Looking ahead, Tofutti Brands anticipates continued challenges in the competitive landscape and potential impacts from market conditions, including inflation and tariffs. The company plans to maintain its current level of selling and marketing expenses while monitoring operational efficiencies. Management remains cautious but optimistic about navigating these challenges and is committed to enhancing product offerings to improve market share.