Mama's Creations Q3 Earnings Lag Estimates, Sales Grow 10% Y/Y

Mama's Creations, Inc. MAMA reported third-quarter fiscal 2025 results, wherein the top line beat the Zacks Consensus Estimate and showed year-over-year growth, while the bottom missed the same and declined year over year. Mama’s Creations delivered strong revenue growth in the fiscal third quarter while completing significant capital expenditures to double grilled chicken throughput and enhance operational efficiency. Despite temporary construction-related challenges at its Farmingdale facility, the company has emerged stronger with November’s preliminary unaudited gross margins showing a sharp rebound and signaling the resolution of prior headwinds.This Zacks Rank #3 (Hold) stock has risen 27.6% in the past three months against the industry’s decline of 6.7%.MAMA’s Quarterly Performance: Key Metrics and InsightsMama’s Creations, a leading national marketer and manufacturer of fresh deli-prepared foods, posted quarterly earnings of 1 cent per share, which missed the Zacks Consensus Estimate of 4 cents and decreased 80% from 5 cents reported in the prior-year period.Find the latest EPS estimates and surprises on Zacks Earnings Calendar.Total revenues of the company rose 10% year over year to $31.5 million and beat the Zacks Consensus Estimate of $30.4 million. This growth was driven by successful pricing strategies and volume gains, which resulted from increased demand, effective trade promotions, cross-selling new products to existing customers and expanding into new customer channels.Gross profit decreased 17.6% to $7.1 million from $8.6 million in the year-ago quarter. The gross margin contracted 750 basis points (bps) to 22.6% compared with 30.1% in the third quarter of fiscal 2024. This decline was caused by significant increases in commodity costs relative to historical averages. Moreover, a non-recurring impact from construction related to the now-completed strategic CapEx projects at the Farmingdale facility hurt gross margins by an estimated 400 bps, according to management.Image Source: Zacks Investment ResearchOperating expenses of $6.6 million increased 10.5% year over year. Operating expenses as a percentage of sales were relatively flat, rising only 10 bps to 20.8% in the third quarter of fiscal 2025. The 90-bps improvement in freight efficiency, offset a 75% year-over-year increase in marketing expenses.Adjusted EBITDA totaled $1.7 million in the third quarter of fiscal 2025. The figure was down from $3.5 million in the prior-year quarter, indicating a decline of 49.6%.MAMA’s Financial SnapshotMama’s Creations ended the fiscal third quarter with cash and cash equivalents of $9.3 million and total shareholders’ equity of $23 million. As of Oct. 31, 2024, total debt was $6.3 million. The company has paid down $2.5 million of debt year to date. During the nine months ended Oct. 31, 2024, the net cash flow provided by operations was $6 million.Stocks to ConsiderIngredion Incorporated INGR manufactures and sells sweeteners, starches, nutrition ingredients and biomaterial solutions derived from wet milling and processing corn and other starch-based materials. The company currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.INGR delivered a trailing four-quarter earnings surprise of 9.5%, on average. The Zacks Consensus Estimate for Ingredion’s current-financial year’s earnings indicates growth of 12.4% from the year-ago reported number.Freshpet Inc. FRPT manufactures, distributes and markets natural fresh meals and treats for dogs and cats. It currently carries a Zacks Rank #2 (Buy). FRPT delivered a trailing four-quarter earnings surprise of 144.5%, on average.The Zacks Consensus Estimate for Freshpet’s current financial-year sales and earnings indicates growth of 27.3% and 228.6%, respectively, from the prior-year reported levels.US Foods Holding Corp. USFD engages in marketing, sale and distribution of fresh, frozen and dry food and non-food products to foodservice customers in the United States. It currently carries a Zacks Rank #2. USFD delivered an earnings surprise of 3.7% in the last reported quarter.The Zacks Consensus Estimate for US Foods Holding’s current fiscal-year sales and earnings indicates growth of 6.4% and 18.6%, respectively, from the prior-year reported levels.Zacks Naming Top 10 Stocks for 2025Want to be tipped off early to our 10 top picks for the entirety of 2025?History suggests their performance could be sensational.From 2012 (when our Director of Research Sheraz Mian assumed responsibility for the portfolio) through November, 2024, the Zacks Top 10 Stocks gained +2,112.6%, more than QUADRUPLING the S&P 500’s +475.6%. Now Sheraz is combing through 4,400 companies to handpick the best 10 tickers to buy and hold in 2025. Don’t miss your chance to get in on these stocks when they’re released on January 2.Be First to New Top 10 Stocks >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Freshpet, Inc. (FRPT): Free Stock Analysis Report Ingredion Incorporated (INGR): Free Stock Analysis Report US Foods Holding Corp. (USFD): Free Stock Analysis Report Mama's Creations, Inc. (MAMA): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks