Easy-to-prepare food manufacturer Mama’s Creations sinking after third-quarter earnings
Shares of easy-to-prepare food maker Mama’s Creations have plunged more than 20% in premarket trading as of this writing today, Tuesday, December 17, following the release of earnings for the fiscal-2025 third quarter, which revealed year-over-year declines in net and gross profit amid revenue growth. Note that the financial report had been delayed after the company’s auditor was replaced.
Details
Mama’s Creations stock dropped over 20% to $7.73 per share in premarket trading on the Nasdaq on Tuesday. In normal trading hours, the stock had not gone that low since November 19. Nevertheless, Mama’s Creations is still up nearly 98% this year, with the current market capitalization at $364.5 million.
On Monday, December 16, the company reported its earnings for the fiscal-2025 third quarter, which ended October 31. In the period, revenue grew 10% year over year to $31.5 million. Net income, however, plunged nearly 80%, along with earnings per share. The gross margin contracted 7.5 percentage points to 22.6% of revenue. The company attributed this to a significant rise in raw material costs and expenses tied to the construction of a new production facility. It noted “a step change improvement” in terms of the latter in November.
The delayed release of the third-quarter earnings was due to a change in the company’s auditor in October. Mama’s Creations claims that the move had nothing to do with any disagreements with the previous auditor regarding “accounting principles or practices, financial statement disclosure, or auditing scope or procedures.”
About the company
Mama’s Creations manufactures fresh deli prepared foods, such as Italian dishes and salads, among others, and supplies them to over 8,000 stores in the U.S. The company was founded in the late 2000s by Dan Mancini (whose real last name is Dougherty) and Carl Wolf with the simple idea to commercialize the Italian recipes of Mancini’s grandmother. Wolf had the production facilities, and Mancini brought the recipes.
The partners started with meatballs before expanding their product line, including through acquisitions. Mama’s Creations calls itself a “one-stop-shop deli solutions platform.” By 2030, the company aims to hit $1 billion in revenue, as reported by investor Simons Chase.
According to MarketWatch, Mama’s Creation stock is covered by four analysts, all of whom rate it as a “buy.” Their average price target is $11 per share, representing upside of approximately 13% versus the last closing price.
