Mama's Creations Q3 2026: Contradictions Emerge on Crown Integration, Costco Sales, and Marketing Strategy

Business Commentary:

* Revenue Growth and Operational Efficiency: - Mama’s Creations reported revenue growth of 50% to $47.3 million in Q3 FY2026 compared to $31.5 million in the same period last year. - This growth was driven by the acquisition of Crown One and robust double-digit growth in the legacy business, supported by balanced geographic expansion, disciplined trade and marketing promotions, and new wins across multiple channels.

• Profitability and Margin Improvement:
• Gross profit increased by 56.6% to $11.1 million, representing 23.6% of total revenues, as compared to 7.1 million, or 22.6% of total revenues in the same year-ago quarter.
• Margin improvements were attributed to operational efficiency, strategic raw chicken price management, and expected alignment of Crown One sales with the corporate average margin in the mid-20% range over the next year.

• Integration and Capacity Expansion:
• The acquisition of Crown One's Bayshore facility enabled a 30% reduction in beef costs within the first month and transitioned production to increase capacity and reduce overtime.
• The strategic location and synergy between facilities have unlocked new production depth and access to premium customers, contributing to the expansion of production capabilities and efficiencies.

• Retail and Consumer Trends:
• Mama’s Creations exceeded its goal of adding two tier-one national retailers, with confirmed branded items in Target and Food Lion stores.
• The success in the grocery deli segment was driven by the increasing demand for high-quality, convenient, and cost-effective deli-prepared foods, supported by strong consumer trends towards shopping for both prepared foods and household items simultaneously.
  

Contradiction Point 1

Crown Integration and SKU Rationalization Progress

It highlights differing levels of progress and expectations regarding the integration and rationalization of the Crown acquisition, which impacts operational efficiency and strategic focus.

Can you update on the planned SKU rationalization of Crown products and progress to date? - Eric Des Lauriers (Craig-Hallum)

2026Q3: The process has started, with meetings on rationalization. We will immediately begin assessing potential efficiencies, and we will start working closely with Bayshore. Our intent is to focus on gross margin improvement. The Bayshore team is helping accelerate the process, and significant progress is expected in 2027. - Adam L. Michaels(CEO & Chairman)

How should we think about Q4 and what seasonality to expect? - Ryan Meyers (Lake Street Capital)

2024Q3: The Bayshore folks can help us with not only getting the better production planning but with the demand forecasting. As we get better at forecasting demand, we'll be able to better support the Bayshore team to drive better operational efficiency. - Adam L. Michaels(CEO)

Contradiction Point 2

Costco Sales Strategy and Performance

It involves differing perspectives on the sales performance and strategy at Costco, which is a critical customer for the company and impacts revenue expectations.

What initiatives are in place to build awareness and visibility for the upcoming Costco MVM products? - Brian Holland (DA Davidson)

2026Q3: The Costco MVM is already in progress. Product is selling well, supported by Instacart programming. The MVM will arrive later this month, offering a discount. - Adam L. Michaels(CEO)

What was the primary driver behind the growth in the Midwest year-over-year and sequentially? - Howard Halpern (Taglich Brothers)

2024Q3: Growth in the Midwest is largely driven by Costco's increased demand, with significant new product placements like sausage and peppers, and expansions in regions like the Midwest, Pacific Northwest, and L.A. - Adam L. Michaels(CEO)

Contradiction Point 3

Marketing and Sales Strategy

It highlights different approaches to marketing and sales strategy, which are crucial for driving growth and expanding market share.

Can you update on this quarter's AIC progress, specifically regarding new items at various customers? - Brian Holland (DA Davidson)

2026Q3: We continue to enrich and expand our product portfolio, especially into new categories. We have made great progress in achieving AIC coverage. In total, we now have 72 SKUs across 10 major categories. - Adam L. Michaels(CEO)

What are the drivers of the accelerated YoY revenue growth from 5.9% in Q1 to 11.5% in Q3? - Eric Des Lauriers (Craig Hallum)

2024Q3: Growth is driven by volume, with both businesses growing double digits, and new customers like Albertsons contributing. Successful marketing and trade promotion efforts are also contributing to growth. - Adam L. Michaels(CEO)

Contradiction Point 4

Crown Acquisition Integration and Strategy

It reflects differing perspectives on the integration strategy and timeline for the Crown acquisition, which is crucial for operational and financial expectations.

What is the status of the Crown product SKU rationalization plan? - Eric Des Lauriers (Craig-Hallum Capital Group)

2026Q3: The process has started, with meetings on rationalization. We will immediately begin assessing potential efficiencies, and we will start working closely with Bayshore. Our intent is to focus on gross margin improvement. The Bayshore team is helping accelerate the process, and significant progress is expected in 2027. - Adam L. Michaels(CEO & Chairman)

Could you discuss the progress with Costco and the significance of the national multi-vendor mailer (MVM)? - Eric Des Lauriers (Craig-Hallum Capital Group)

2026Q2: We're excited about the integration, which we'll approach patiently. We expect to look at SKUs and customer needs together. Our goal is to enhance Crown's margins and integrate well with our existing operations. - Adam Michaels(CEO & Chairman)

Contradiction Point 5

Costco Sales and National MVM Importance

It highlights differing views on the significance of Costco sales and the national multi-vendor mailer (MVM), which can impact strategic and financial planning.

What initiatives are in place to build awareness and visibility for the upcoming Costco MVM products? - Brian Holland (DA Davidson)

2026Q3: The Costco MVM is already in progress. The product is selling well, supported by Instacart programming. The MVM will arrive later this month, offering a discount. - Adam L. Michaels(CEO)

Can you discuss progress with Costco and the MVM's significance? - Eric Des Lauriers (Craig-Hallum Capital Group)

2026Q2: We've made significant progress with Costco, from $570,000 in sales with one product to $10 million this year. Our national MVM is a new milestone, expected to generate significant sales. Costco is a great partner, and we're confident that an everyday item status could further enhance our presence. - Adam Michaels(CEO & Chairman)