Tofutti Brands Inc. Reports 11% Decline in Q2 Sales Amid Competitive Pressures

Tofutti Brands Inc. reported a decline in financial performance for the second quarter of 2025, with net sales decreasing by 11% to $2.03 million compared to $2.28 million in the same period last year. For the first half of the fiscal year, the company experienced a more significant drop, with total sales falling 19% to $3.62 million from $4.50 million. The decrease in revenue was attributed to heightened competition in the vegan cheese market and uncertainty surrounding proposed tariffs, which led major customers to pause their purchasing plans.

Despite the decline in sales, Tofutti's gross profit for the second quarter increased slightly to $618,000, resulting in a gross profit margin of 30%, up from 29% in the prior year. The company implemented significant price increases at the end of 2024, which contributed to a gross profit of $1.21 million for the first half of 2025, compared to $1.14 million in the same period of 2024. However, the overall profitability was impacted by a net loss of $7,000 for the second quarter and $169,000 for the first half, reflecting improvements in cost management but still resulting in negative earnings.

Operationally, Tofutti's selling expenses decreased by 25% to $188,000 in the second quarter, primarily due to reduced meeting and convention costs. Marketing expenses saw a slight increase, while product development costs rose by 77% to $39,000, driven by higher professional fees. The company anticipates maintaining lower selling and general administrative expenses for the remainder of 2025, which may help stabilize its financial position.

As of June 28, 2025, Tofutti had approximately $350,000 in cash and working capital of $2.73 million, down from $462,000 and $2.89 million, respectively, at the end of 2024. The company reported a net cash outflow from operating activities of $108,000 for the first half of 2025, an improvement from $344,000 in the prior year. Management believes that existing cash reserves and anticipated cash flows will be sufficient to meet operational needs over the next twelve months.

Looking ahead, Tofutti Brands Inc. faces challenges from competitive pressures and potential tariff impacts on sales. The company is focused on managing costs and maintaining operational efficiency while navigating these market conditions. The management's outlook suggests a cautious approach, with expectations of continued pressure on sales but a commitment to improving profitability through strategic cost management and product pricing adjustments.