Executive Summary / Key Takeaways

• Mama's Creations is strategically expanding its market leadership in deli prepared foods through a disciplined "four C's" strategy (Cost, Controls, Culture, Catapult) and accretive acquisitions.
• The recent acquisition of Crown I Enterprises for $17.5 million significantly boosts the company's revenue run rate to approximately $200 million, adds critical production capacity, and broadens its customer base with premium retailers.
• Operational efficiencies, including advanced manufacturing technologies like Modified Atmospheric Pressure (MAP) packaging and in-house chicken trimming, are driving gross margin expansion and enhancing competitive differentiation.
• The company reported robust financial performance, with Q2 fiscal 2026 revenue increasing 24% year-over-year to $35.2 million and gross profit improving to 25% of net sales, supported by strong volume growth and targeted pricing actions.
• Mama's Creations is well-positioned to capitalize on favorable industry trends, such as consumer shifts towards convenient, high-quality deli prepared foods, and aims for double-digit revenue growth and Adjusted EBITDA margins in the teens percentage range.

The Deli Revolution and Mama's Strategic Ascent

Mama's Creations, Inc. (MAMA) is rapidly transforming the deli prepared foods landscape, evolving from a regional Italian food specialist into a national "one-stop-shop deli solutions platform." This strategic ascent is particularly timely, as consumers increasingly seek value, quality, and convenience in their food choices. The market is experiencing a "generational change in consumer preferences," driven by "restaurant price fatigue" and "menu fatigue," which are steering shoppers back to grocery stores for both savings and variety. This dynamic is underscored by recent CPI data, which shows a nearly twofold disparity between away-from-home and at-home inflation rates, making supermarket prepared foods an attractive alternative.

The deli prepared foods category is expanding at over 5% annually, and Mama's Creations is significantly outpacing this, growing at approximately three times that rate and consistently gaining market share. This robust growth is a testament to the company's foundational "three C strategy"—Cost, Controls, and Culture—initiated by CEO Adam Michaels in September 2022, and later expanded to include "Catapult." This framework has enabled Mama's Creations to rebuild and strengthen its business fundamentals, becoming "brilliant at the basics" and positioning itself for aggressive, profitable expansion.

Technological Edge and Operational Mastery

Mama's Creations differentiates itself through a commitment to "Grandma Quality" products, supported by advanced operational and technological capabilities. The company's products are USDA-approved as "all-natural," free from artificial ingredients, coloring, or chemical preservatives, and are minimally processed.

A core technological differentiator is the use of Modified Atmospheric Pressure (MAP) packaging. This technology extends the shelf life of products, offering tangible benefits to retailers by reducing spoilage and labor for in-store preparation. Crown I Enterprises, a recent acquisition, brings years of experience with MAP technology, enhancing Mama's Creations' existing capabilities and allowing for broader scalability across its network. For instance, the company has leveraged MAP technology to launch four new "Meals for One" with Publix and new items in Amazon Fresh (AMZN) stores, demonstrating its practical application in expanding product reach and reducing retailer burden.

Another critical operational advancement is the in-house chicken trimming process. By investing in new grill lines and chicken processing equipment at its Farmingdale facility, Mama's Creations has more than doubled its chicken capacity and insourced key value-added services previously outsourced. This initiative is outperforming initial targets, running 35% ahead of plan, and new tumbling procedures have increased yields by approximately 10%. The strategic intent is to support over half of the company's chicken needs through in-house trimming by mid-year, with the potential to lower costs by "close to a full dollar per pound" and significantly improve margins. This capability also allows the company to purchase jumbo chicken, which is more readily available, further driving procurement efficiencies.

Beyond manufacturing, Mama's Creations leverages technology for enhanced "Controls." The NetSuite ERP system provides "unparalleled visibility" into pricing, margins, and inventory, while a recently implemented warehouse management system (WMS) in East Rutherford minimizes waste and optimizes working capital. The rollout of Sales & Operations Planning (S&OP) is expected to further boost production efficiency and service levels. Quality control is also paramount, with new X-ray and PCR testing complementing existing metal detection to ensure food safety. These technological and operational advancements collectively contribute to a strong competitive moat, enabling cost savings, consistent quality, and rapid market responsiveness, which are crucial for driving financial performance and market positioning.

Financial Performance: A Trajectory of Profitable Expansion

Mama's Creations has demonstrated a compelling trajectory of profitable expansion, reflecting the effectiveness of its strategic initiatives. For the three months ended July 31, 2025 (Q2 fiscal 2026), net sales surged by 24% year-over-year to $35.20 million, primarily driven by volume gains from successful trade and marketing promotions, new product introductions, and new customer acquisitions. This momentum continued into the six-month period, with net sales growing 21% to $70.46 million.
Gross profit for Q2 fiscal 2026 increased 28% to $8.77 million, with the gross profit margin improving to 25% from 24% in the prior year. This improvement was a direct result of enhanced labor and procurement efficiency and better fixed overhead absorption, despite persistent protein commodity headwinds. While operating expenses increased by $1.80 million in Q2 fiscal 2026 due to new executive hires, increased advertising, and freight costs, these investments are strategic, aimed at driving repeatable and profitable brand growth. Net income for Q2 fiscal 2026 rose 11% to $1.3 million, or $0.03 per diluted share.

The company's liquidity and balance sheet have also strengthened considerably. As of July 31, 2025, cash and cash equivalents grew to $9.4 million from $7.2 million at January 31, 2025, driven by improved profitability and working capital optimization.

Total debt significantly decreased to $2.7 million as of July 31, 2025, compared to $6.8 million a year prior, demonstrating prudent financial management. This robust financial position, further supported by a $27.4 million credit facility with M&T Bank (MTB), provides a "cash war chest" for pursuing both organic and inorganic growth opportunities.

Strategic Growth Pillars: Acquisitions and Market Penetration

Mama's Creations' growth strategy is multifaceted, combining disciplined acquisitions with aggressive market penetration through its "Catapult" initiatives. The recent acquisition of Crown I Enterprises on September 2, 2025, is a pivotal move, adding approximately $56 million in profitable annual revenue (for the fiscal year ended June 28, 2025) and increasing Mama's Creations' sales base by nearly 40%. This all-cash transaction of $17.50 million, financed through a private placement of common stock and an amended credit facility, was executed at an attractive 0.3x Crown I's fiscal 2025 revenue.

Crown I brings a 42,000-square-foot USDA-certified production facility in Bay Shore, New York, just 10 miles from Mama's Farmingdale location, equipped with similar grilling equipment. This provides "immediate derisked capacity" and nearly 200 experienced operators, enhancing Mama's Creations' production capabilities, particularly in chicken. While Crown I's gross margin profile is currently in the mid-teens, management expects to "structurally lift our combined gross margin profile from the low 20% range today towards Mama's historical levels in the mid- to high 20% range" within 12 to 18 months through operational efficiencies, improved throughput, joint chicken purchasing, and better coordination of machinery and logistics. The acquisition is expected to be accretive this fiscal year and significantly advances the company's "path to $1 billion of revenue."

Organically, the "Catapult" strategy is driving impressive market penetration. The sales team is accelerating growth in the club channel, securing new non-protein items at BJ's (BJ), paninis at Sam's Club (WMT), and chicken meatballs at Costco (COST). A significant win is the first-ever national multi-vendor mailer (MVM) at Costco in Q4, which was not initially budgeted but is expected to drive substantial sales of the company's meatballs across the country. The company has also partnered with Publix to launch four new "Meals for One" leveraging MAP technology, and its new panini line has "exploded" into over 2,000 doors, anchored by Sheetz, Sam's Club, and Publix, exceeding velocity expectations. Mama's Creations has also expanded into new customers like Lidl and Amazon Fresh. These efforts are supported by high-ROI marketing initiatives, such as Instacart promotions delivering over a $6 return on advertising spend (ROAS) and Walmart digital campaigns achieving a double-digit ROAS.

Competitive Positioning: Differentiated in a Fragmented Market

Mama's Creations operates in a highly competitive and fragmented deli prepared foods market, vying with larger, established players like Conagra Brands (CAG), Tyson Foods (TSN), Hormel Foods (HRL), and General Mills (GIS), as well as numerous smaller, regional, and private-label providers. While precise, directly comparable market share figures for all niche competitors are not publicly detailed, Mama's Creations is consistently gaining market share, growing approximately three times faster than the overall deli prepared category.

Mama's Creations' competitive advantages stem from its "Grandma Quality" promise, operational agility, and strategic focus on customer relationships. The company's emphasis on all-natural, minimally processed products resonates with consumer demand for high-quality, fresh options. Its technological differentiators, such as MAP packaging and in-house chicken trimming, provide a tangible edge. MAP technology, for instance, extends shelf life, offering a benefit that larger competitors may not fully replicate across their diverse portfolios, thereby enhancing Mama's appeal to retailers seeking to reduce waste and labor. The ability to trim chicken in-house allows for greater control over costs and supply, mitigating commodity price volatility more effectively than competitors reliant on external processing.

The Crown I acquisition further strengthens Mama's competitive standing by adding "hard to break into" premium retail partners who were not existing Mama's customers. This expands Mama's reach into strategic new accounts, complementing its existing roster and opening new channels for cross-selling opportunities. Crown I's predominantly private label business also means a significantly lower trade rate, which can contribute to overall margin improvement for the combined entity.

While larger competitors benefit from economies of scale and broader distribution networks, Mama's Creations' strategy of focusing on high-growth segments like convenience foods and leveraging direct distribution channels (including its website and targeted club/mass retailers) allows it to be more responsive to evolving consumer preferences. The company's consistent investment in trade promotion and marketing, with a focus on high ROI, is building brand awareness and fostering indispensable partnerships with retailers. This targeted approach, combined with a disciplined M&A strategy, positions Mama's Creations to continue consolidating the fragmented prepared foods market and solidify its position as a national leader.

Outlook and Risks: Charting the Course Ahead

Mama's Creations is poised for sustained profitable growth, with management expressing strong optimism for the future. Following the Crown I acquisition, the company's revenue run rate stands at approximately $200 million. Management anticipates "double-digit revenue growth" for the fiscal year and aims for Adjusted EBITDA margins in the "teens percentage range" in the long term. The gross margin profile, which will initially hover in the low 20% range post-Crown I acquisition due to Crown's lower margins, is expected to "structurally lift" to Mama's historical mid-to-high 20% range within 12 to 18 months, driven by operational efficiencies and procurement synergies.

Key assumptions underpinning this outlook include the successful integration of Crown I, continued operational efficiencies from in-house chicken trimming and other initiatives, and effective deployment of trade promotion and marketing investments. The recent decrease in chicken prices, noted as a full dollar per pound cheaper than in early Q2 fiscal 2026, is a favorable development that supports the gross margin outlook. Furthermore, the company expects to expand capacity at its East Rutherford facility in the coming year, further enhancing productivity.

Despite this positive outlook, investors should consider several risks. The industry remains subject to intense competition and fluctuating consumer demand. Commodity price volatility, particularly for proteins like chicken and beef, poses a continuous challenge, although Mama's Creations mitigates this through fixed-price contracts covering over half of its protein needs and in-house trimming capabilities. Integration risks associated with the Crown I acquisition, including the realization of anticipated synergies and the retention of key personnel, are also factors to monitor. Additionally, the company has identified material weaknesses in internal control over financial reporting, with remediation efforts ongoing and targeting completion by January 31, 2026. While management believes its cash resources are sufficient for the next twelve months, additional funding may be required for future growth initiatives.

Conclusion

Mama's Creations is executing a deliberate and effective strategy to become a dominant force in the national deli prepared foods market. The company's disciplined approach, anchored by its "four C's" framework and a commitment to "Grandma Quality" products, has driven impressive financial results and operational improvements. The recent, accretive acquisition of Crown I Enterprises marks a significant leap in scale, capacity, and customer reach, propelling Mama's Creations towards its ambitious $1 billion revenue goal.

With a robust balance sheet, a proven playbook for integrating acquisitions, and a continuous focus on technological advancements like MAP packaging and in-house chicken trimming, Mama's Creations is well-equipped to capitalize on favorable industry tailwinds. The company's ability to consistently gain market share, coupled with its strategic investments in marketing and distribution, positions it for sustained double-digit revenue growth and expanding profitability. While commodity price volatility and integration challenges remain, Mama's Creations' proactive management and differentiated competitive advantages suggest a compelling investment thesis for long-term growth in the evolving prepared foods sector.