Mama's Creations has delivered impressive second-quarter results for fiscal year 2026, demonstrating significant growth across key financial metrics. The strategic acquisition of Crown One Enterprises marks a pivotal moment, poised to enhance the company's market footprint, diversify its product offerings, and solidify its position as a leader in the deli prepared foods sector. This move, coupled with an disciplined operational approach and an expansion into various retail channels, underscores Mama's Creations' commitment to sustained profitable growth.
The company's strong performance is not solely attributed to inorganic growth; organic initiatives, such as increased marketing spend, optimized trade promotions, and successful product launches, have also played a crucial role. Management's forward-looking strategy emphasizes leveraging new capacities, improving operational efficiencies across all facilities, and fostering cross-selling opportunities to achieve ambitious revenue targets. The focus on integrating the acquired business seamlessly, while maintaining a keen eye on market dynamics and consumer preferences, positions Mama's Creations for continued success in a competitive landscape.
Strategic Expansion and Financial Performance
Mama's Creations (MAMA) reported a strong second quarter for fiscal year 2026, with revenue increasing by 24% year-over-year, reaching $35.2 million. This growth was fueled by higher sales volumes, successful cross-selling of new products to existing customers, accelerated sales of current items, and the expansion into new customer locations. Net income also saw an 11% rise, totaling $1.3 million, or $0.03 per diluted share. Adjusted EBITDA, a non-GAAP measure, grew by 18% to $3.3 million. The company's gross profit improved by 28% to $8.8 million, representing 25% of total revenues, up from 24% in the previous year's comparable quarter. This improvement was largely due to operational efficiency enhancements, despite facing challenges from protein commodity price increases and increased trade investments. Operating expenses stood at $7.1 million, or 21% of sales, reflecting a strategic increase in marketing spend by 75% year-over-year to drive brand growth. Furthermore, the company's financial health strengthened, with cash and cash equivalents rising to $9.4 million and total debt reducing to $2.7 million, providing significant flexibility for future growth initiatives.
A major strategic move during the quarter was the all-cash acquisition of Crown One Enterprises for $17.5 million. This acquisition is expected to be immediately accretive to Mama's Creations' earnings, adding approximately $56 million in annual revenue and bringing an upgraded 42,000 sq. ft. USDA-certified facility and a team of around 200 experienced operators. The integration of Crown One is projected to significantly boost production capacity, especially in chicken products, and expand market reach into new retail segments. Crown One's expertise in modified atmosphere packaging (MAP) technology and private-label manufacturing capabilities will further enhance Mama's Creations' operational efficiencies and product innovation. The company plans to leverage cross-facility collaboration and shared equipment resources to optimize operations and drive structural improvements in gross margins, aiming to bring Crown One's mid-teens gross margin profile closer to Mama's historical mid-to-high 20% range over the next 12-18 months. This strategic acquisition is a testament to Mama's Creations' disciplined approach to M&A, focusing on targets that provide meaningful synergies and accelerate its path towards its ambitious $1 billion revenue goal.
Operational Excellence and Market Penetration
Mama's Creations' operational strategy is guided by its 'four C's' framework: Cost, Controls, Culture, and Catapult, a playbook now being extended to the newly acquired Crown One facility. In terms of Cost, the company has achieved notable success in driving efficiency, particularly in freight line management, which has led to a 60 basis point reduction in costs compared to the previous year. The establishment of centers of excellence in logistics, procurement, and IT further optimizes scale. The acquisition of Crown One will nearly double the company's raw chicken needs, presenting opportunities for improved procurement costs through increased volume. Regarding Controls, the successful implementation of a warehouse management system in East Rutherford has provided enhanced inventory visibility, reducing waste and improving customer service levels. NetSuite upgrades across the network ensure real-time monitoring of raw material costs, enabling agile adjustments. The plan is to integrate Crown One onto the NetSuite system early next year to ensure seamless operations across all three facilities.
The third 'C', Culture, emphasizes the importance of human capital, with initiatives like the heritage mentorship program designed to develop leadership skills and foster a strong sense of purpose among employees. The integration of Crown One's team is being managed with a comprehensive M&A playbook to ensure a smooth transition and instill a shared 'grandma-quality' culture. Finally, 'Catapult' signifies the company's aggressive growth trajectory, marked by another quarter of over 20% growth, significantly outpacing the category. The sales team's strategic focus on the club channel has resulted in new product placements and promotional events, such as a national multi-vendor mailer at Costco, expected to drive substantial sales. The paninis line has seen an unexpected surge in popularity, securing placement in over 2,000 locations and exceeding velocity expectations. Additionally, strong partnerships with major retailers like Walmart, utilizing digital marketing and influencer campaigns, are accelerating brand penetration and sales velocity. The company's operational infrastructure and robust balance sheet, further bolstered by the Crown One acquisition, position it well to capitalize on growing consumer demand for convenient, high-quality deli prepared foods, reinforcing its one-stop-shop strategy.
