Mama’s Creations reports Q3 EPS 1c, consensus 4c

Reports Q3 revenue $31.5, consensus $30.05M. “We delivered a robust 10% revenue growth to $31.5M in the quarter, while concurrently completing CapEx investments to double our grilled chicken throughput, adding world-class senior leadership, and positioning Mama‘s Creations (MAMA) to fully realize its growth potential,” said Adam L. Michaels, Chairman and CEO of Mama’s Creations. “While our East Rutherford facility is already achieving our long-term gross margin target north of 30%, the tail end of construction-related disruptions in August and September at our Farmingdale facility drove a 400 basis point impact to our third quarter gross margins, further pressured by chicken prices. These construction challenges are now firmly behind us, as our preliminary unaudited November gross margin profile saw a step change improvement, indicative of a full reversal of the construction headwinds with significant room for further improvement. “As part of our continued focus on our 4 Cs – Cost, Controls, Culture and Catapult – during the third quarter we focused on implementing automation and operational efficiency improvements across the organization. This included the aforementioned CapEx investments that were completed in September, improvements in chicken trimming capabilities as well as labor cost savings through a new lower-overtime staffing model that will be fully implemented in December, and additional procurement efficiencies and recent upgrades to our existing grills that will drive meaningful improvements in throughput. When taken together, we expect to see a materially stronger go-forward margin profile more in-line with historical norms.