Mama's Creations (MAMA) Q2 Earnings call transcript Sep 10, 2025
2min read In Mama's Creations' recent earnings call for the second quarter of fiscal 2025, the company showcased a strong performance, anchored by a strategic focus on cost management, operational efficiencies, and market expansion. Amidst a rapidly evolving deli market, Adam Michaels, CEO, guided the company through a period of significant growth and strategic positioning, highlighting a path towards becoming a leading one-stop shop deli solution on a national scale.
Strategic Positioning Amidst Market Trends
Mama's Creations has navigated the changing landscape of the deli market with aplomb. The company's strategy to become a one-stop shop deli solution has been shaped by the seismic shift in consumer preferences towards prepared foods in grocery stores, driven by inflation, changing restaurant dynamics, and the rise of food delivery services. These trends have led to an increase in demand for deli prepared meals, with consumers seeking high-quality, variety, and convenience. Mama's Creations has capitalized on this trend by expanding its offerings, improving product quality, and focusing on operational efficiency.
Operational Efficiency and Cost Management
Mama's Creations' operational efficiency has been a cornerstone of its success. The company's focus on cost management, controls, and culture has been instrumental in improving gross margins and cash flow. Notably, the company's cost of goods has been reduced through in-sourcing key value-added services, while logistics management has been optimized through full truckloads and stronger partnerships with logistics 3PLs. These efforts have not only improved margins but also created a cycle of higher and higher gross margins.
Market Expansion and Strategic Partnerships
Mama's Creations' strategic partnerships have played a crucial role in its market expansion. The company's recent addition of major retailers like Walmart and Costco underscores its ability to penetrate new markets and increase its reach. These partnerships, coupled with the company's focus on trade promotion and marketing, are expected to accelerate growth and broaden national distribution.
Investment in Future Growth
Mama's Creations' strategic investment in CapEx is a testament to its long-term growth plans. The company's focus on automation and in-house capabilities earlier in the value chain positions it well to meet the demands of a growing market and mitigate commodity inflation. These investments, coupled with ongoing operational improvements, are expected to offset some of the commodity inflation and move gross margins into the low-30% range over the long term.
Looking Ahead
Mama's Creations' strong performance in the second quarter of fiscal 2025 underscores its ability to navigate the changing deli market and capitalize on growth opportunities. With a focus on cost management, operational efficiency, and strategic partnerships, the company is well-positioned to expand its reach and solidify its position as a leading deli solutions provider. As it continues to invest in CapEx and trade promotion, Mama's Creations is poised to drive growth and create sustainable long-term value for its shareholders.