Mama's Creations Plunges 17.01% Despite Revenue Surge

On April 10, 2025, Mama's Creations experienced a significant drop of 17.01% in pre-market trading, reflecting investor concerns and market sentiment.

Mama's Creations reported strong financial results for the fourth quarter and fiscal year 2025, with revenues increasing by 25.7% to $33.6 million, achieving a 27.0% gross margin. The company secured significant new customers, including Walmart, Albertsons, Costco, and Amazon Fresh. Operational achievements included securing first-ever fixed-price protein contracts for beef and chicken, covering 50% of projected FY2026 volume, and completing strategic CapEx projects to double grilled chicken throughput.

Despite the revenue growth, the company faced profitability challenges. Full-year net income declined by 43% to $3.7 million, with EPS falling by 47.1% to $0.09. Annual gross margin compressed from 29.4% to 24.8%, indicating substantial margin pressure. Management attributed the margin compression to commodity cost increases and non-recurring construction disruptions at the Farmingdale facility, which were resolved by September.

Mama's Creations' strategic CapEx investments and prudent debt reduction explain the decline in cash position from $11.0 million to $7.2 million. The company's operational initiatives, including securing fixed-price protein contracts for half of their FY2026 volume and implementing a new overtime staffing model, create a potential pathway to margin recovery. Q4's results suggest these efforts may be starting to yield benefits, with quarterly net income growing by 13.6% year-over-year despite ongoing pressures.