Executive Summary
Overview: Mamas Creations Inc reported Q3 FY2025 revenue of $31.5 million, up 10% year over year, driven largely by volume and selective pricing actions. However, gross margin declined to 22.6% from 30.1% in the prior-year quarter, reflecting persistent commodity cost pressures and a material, non-recurring 400 bp drag from completed CapEx construction at the Farmingdale facility. Operating and net income declined materially YoY, with net income of $0.41 million (1.3% of revenue) and diluted EPS of $0.01, against $2.01 million net income and $0.05 EPS in Q3 FY2024. Free cash flow remained positive at $2.52 million, and operating cash flow was $4.80 million, aided by continued working capital improvements and capital discipline.
Strategic execution: Management framed the quarter around the 4 Cs—costs, controls, culture—and the newly introduced catapult growth lever, with rapid introductions of new items, channel expansion (Walmart, Costco, BJ's, Publix), and marketing/trade investments. CapEx at Farmingdale doubled chicken capacity via two new grills, with a stated objective to move margins toward the low- to mid-30% range in the long run, supported by in-house capabilities and intensified trade promotion. Management emphasized that the business is now past construction headwinds, with November gross margins demonstrating a rebound from the Q3 drag. The company also signaled a potential M&A pathway to consolidate in the fragmented prepared foods market, supported by a strengthened balance sheet.
Outlook: The management commentary is cautiously constructive on the near-term path to higher margins through cost and throughput improvements, better procurement, and selective pricing, while maintaining a robust balance sheet to support opportunistic acquisitions. The company anticipates normalized gross margins in the high-20s range in the near term, with a long-term objective toward the low-30s margins as CapEx investments yield efficiency gains and trade promotions scale toward a targeted 10% of revenue. Investors should monitor commodity volatility, supply chain dynamics, and the pace of new product rollouts and retailer conversions, alongside M&A progress and trading investments.
Key Performance Indicators
QoQ: -65.07% | YoY:-79.20%
QoQ: -64.29% | YoY:-79.59%
QoQ: -64.50% | YoY:-79.85%
Key Insights
Revenue: Q3 2025 revenue of $31.5 million, up 10% YoY and 11% QoQ; Gross Profit: $7.11 million (gross margin 22.6%), down from $8.64 million (GM 30.1%) in the same year-ago quarter; Operating Income: $0.563 million (1.79% margin), down from $2.701 million in Q3 FY2024; Net Income: $0.41 million (1.30% margin) vs $2.01 million in the prior-year quarter; EBITDA: $1.063 million (EBITDA margin approx. 3.4%); Adjusted EBITDA: $1.70 million; Net Income per Diluted Share: $0.01; Cash Flow: Operating ca...
Financial Highlights
Revenue: Q3 2025 revenue of $31.5 million, up 10% YoY and 11% QoQ; Gross Profit: $7.11 million (gross margin 22.6%), down from $8.64 million (GM 30.1%) in the same year-ago quarter; Operating Income: $0.563 million (1.79% margin), down from $2.701 million in Q3 FY2024; Net Income: $0.41 million (1.30% margin) vs $2.01 million in the prior-year quarter; EBITDA: $1.063 million (EBITDA margin approx. 3.4%); Adjusted EBITDA: $1.70 million; Net Income per Diluted Share: $0.01; Cash Flow: Operating cash flow $4.80 million; Free cash flow $2.52 million; Cash and Equivalents: $9.32 million at 2024-10-31; Total debt: $11.05 million; Net debt: $1.73 million; Working capital improvements contributed to 23.7% YoY cash flow from operations growth; Balance sheet strength: Total assets $47.9 million; Total stockholders’ equity $23.0 million; Current ratio 1.17; Quick ratio ~1.0; Debt-to-capitalization 32.5%; Inventory $3.19 million; Receivables $8.57 million.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
31.52M |
10.04% |
11.07% |
| Gross Profit |
7.11M |
-17.63% |
3.40% |
| Operating Income |
563.00K |
-79.20% |
-65.07% |
| Net Income |
410.00K |
-79.59% |
-64.29% |
| EPS |
0.01 |
-79.85% |
-64.50% |
Key Financial Ratios
operatingProfitMargin
1.79%
operatingCashFlowPerShare
$0.13
freeCashFlowPerShare
$0.07
priceEarningsRatio
170.45
Management Commentary
Theme: Strategy and growth. Quote: Adam Michaels highlighted a 10% broad-based revenue growth driven by CapEx at Farmingdale and the 4 Cs framework, with an emphasis on becoming a national One Stop Shop Deli Solution. Theme: Margin recovery and CapEx impact. Quote: CFO Anthony Gruber noted that construction headwinds reduced corporate margins by about 400 basis points, with margins expected to recover as of November; management expects gross margins to recover in line with contract-driven price and procurement actions. Theme: Commercial execution and catapult. The leadership additions (CCO Chris Darling and COO Skip Tappan) are described as essential to aligning demand and supply, accelerating SKU velocity, and expanding into new major tiers of retailers, including Walmart and Costco, while wage, overtime, and procurement improvements support margin recovery.
The third quarter was highlighted by 10% broad based revenue growth as we completed CapEx investments in our Farmingdale facility to double our chicken capacity, added world class executive leadership and a continued focus on our 4 Cs cost, controls, culture and catapult.
— Adam L. Michaels
The construction challenges are now firmly behind us as we saw a step change improvement in our preliminary unaudited November gross margin profile fully reversing the construction headwinds seen in Q3 with significant room for further growth.
— Anthony Gruber
Forward Guidance
Near term: Expect normalized gross margin in the high-20s as commodity headwinds abate and CapEx effects normalize. Medium term: Target low-30s gross margins through ongoing CapEx optimization, procurement efficiencies, labor management, and price/mix discipline; long-term: adjusted EBITDA margins in the teens as the company scales its catapult investment in trade promotions and marketing to drive higher velocity and select M&A opportunities to accelerate market consolidation. Key monitors: commodity price trends (especially chicken and beef), progress and CAPEX returns from Farmingdale and East Rutherford facilities, effectiveness of trade promotions and marketing ROI (ROAS), store-level execution (shelf availability) and retailer acceptance, and M&A pipeline/valuation dynamics.