On September 3, Mama’s Creations (NASDAQ:MAMA) reported second quarter fiscal 2027 results that turned a familiar growth story into something sturdier. Revenue jumped 55% to $54.6 million, but the number that mattered more sat underneath it: net income more than doubled to $2.6 million, and adjusted EBITDA climbed 68.9% to $5.5 million. Every profit metric outran the top line, exactly the sequence management had promised three months earlier when it front loaded costs into new product launches.
Every Line Grew Faster Than Sales
Distribution is scaling fast. October brings Mama’s first placement inside banner Kroger, with over 100 stores in the Louisville division stocking four items. Costco has already confirmed the company for a second-half multi-vendor mailer across all eight national regions, a promotion expected to move more volume than it did last year. Walmart shelf space has grown past 2,300 stores, and high-protein items like grilled chicken are gaining velocity every week, while Sam’s Club is adding 300 clubs for a new panko chicken product this quarter.
Margins are catching up to the growth, too. Gross margin ticked up to 24.0% from 23.6% in the first quarter as new packaging lines and protein formats reached steady state, and operating expenses fell 160 basis points to 18.5% of revenue as the business added scale without adding overhead. A July stock offering brought in $108.6 million, pushing cash to $138.6 million against just $4.8 million of total debt as of July 31. Operating cash flow of $11.9 million over the first six months gives the balance sheet room to chase acquisitions without straining the business.
The Margin Mix Problem
The growth is not evenly profitable. CEO Adam Michaels flagged what he called the “challenge” of chicken bottom percentages not growing as fast as overall volume, since those dark meat cuts carry higher margins than the portion chicken products currently driving the fastest sales gains. At Walmart, some newer items, sausage and peppers and meatloaf among them, are moving at lower velocity than chicken and meatball products, a reminder that not every new placement performs evenly.
The Bay Shore facility acquired last year is still working toward the company’s corporate average margins rather than already matching them, meaning part of the reported growth is still digesting. Trade spend rose more than $1 million year over year, with another $500,000 shifted over from marketing, support that helped drive new placements but also shows how much promotional spending it currently takes to keep the shelves moving.
What The Smart Money Sees
Hedge fund ownership rose from 17 funds to 30 in the most recent quarter, a notable pickup in institutional interest. Short sellers have not backed off much, with 7.30% of the float sold short, enough to suggest a real skeptical camp remains. The stock trades at 86.56 times forward earnings as of September 11, a multiple that prices in years of continued fast growth rather than the business Mama’s is today. That combination points to a market that is optimistic but not yet fully convinced.
A Long Runway Still Unproven
Mama’s Creations has now shown two straight quarters where the plan it laid out played out on schedule, and it enters the back half of the year with a national retailer for the first time and a balance sheet built for acquisitions. The bull case rests on new distribution converting into durable, higher-margin volume as chicken bottom placements catch up to the faster-moving portion items. The bear case rests on execution, whether Bay Shore keeps closing its margin gap and whether the company can keep winning shelf space without leaning as hard on trade spend.
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