Tue, Sep 10, 8:14 PM (300 days ago)
For the quarter ending July 31, 2024, Mama's Creations, Inc. reported net sales of $28,382,000, a 14.5% increase from $24,790,000 in the same period last year. However, costs of sales rose by 24% to $21,503,000, resulting in a gross profit margin decline from 30% to 24%. Net income decreased to $1,148,000 from $1,742,000, primarily due to rising commodity costs, particularly chicken, which impacted profit margins. Operating expenses remained stable, but the company faced a one-time legal settlement costing approximately $900,000. For the six-month period, net sales increased by 21.5% to $58,220,000, yet net income fell to $1,701,000 from $3,144,000. Cash flow from operations showed a decline, with $1,234,000 generated compared to $3,358,000 in the prior year, attributable to increased working capital needs. As of July 31, 2024, working capital decreased to $5,353,000, reflecting a drop in cash and inventory levels. The company has no outstanding balance on its credit line but has approximately $3.8 million in term loans. Future operations may face challenges due to rising costs and competitive pressures, necessitating careful monitoring of cash flow and expense management.