Q4 2025 Mama's Creations Inc Earnings Call
Good afternoon, ladies and gentlemen. Thank you for standing by.
Welcome to Mama's Creations fourth quarter fiscal 2025 earnings conference call. During today's presentation, all parties will be in a listening mode. Following the presentation, the conference will be open for questions.
This conference is being recorded today, Tuesday, April 8, 2025, and the earnings press release accompanying this conference call was issued after the market closed today.
four-looking statements within the meaning of federal security's laws regarding Mama's Creations.
For the statements include, but are not limited to, statements that express the company's intentions, beliefs, expectations, strategies, predictions or any other statements relating to its future earnings, activities, events, or conditions.
These statements are based on current expectations, estimates, and projections about the company's business based in part on assumptions made by management.
These statements are not guaranteed that future performance and involve risks uncertainties and assumptions that are difficult to predict.
Therefore, actual outcomes and results may and are likely to differ materially for what is expressed or forecasted in the four statements they can do to numerous factors discussed from time to time in the company's 10K and other documents which the company filed with the U.S. Securities and Exchange Commission.
In addition, such statements could be affected by risks and uncertainties related to factors beyond the company's control.
Matters that may cause actual results to different materially from those in their foreign statements include, among other factors, the loss of key management personnel, availability of capital and any major litigation regarding the company.
A reconciliation of adjusted e-retaught to its most directly comparable GAAP financial measure is included in today's arenas release, which is available on the Mama's Creations website under the investors' time. And finally, this conference hall contains time-sensitive information that reflects the management's best analysis, only as of the date and time of this conference hall.
Speaker Change: The company does not undertake any obligations to publicly update or revise any forcing statements to reflect retreat events, information or circumstances that arise after the date of this conference call. At this time, I'd like to turn the call over to Chairman and CEO Adam Michaels. Adam, the floor is yours.
Speaker Change: Thank you, operator, and thank you to everyone for joining us today. I'd like to welcome you to our fourth quarter fiscal 25 financial results conference call.
Speaker Change: The fourth quarter is highlighted by robust 25.7% broad-based revenue growth and a 440 basis point sequential improvement to a fiscal year record quarterly gross margin of 27%.
Speaker Change: These results were enabled by the completion of strategic CAPEX investments in our Farmer Delfacility to more than double our chicken capacity, a world-class leadership team which was finalized in the quarter, and a continued focus on our four C's, costs, controls, culture, and catapult.
Speaker Change: Our goal to emerge as a leading one-stop shop, Delhi solution on a national scale is grounded in a purposeful, persistent and patient strategic plan to capture what is a generational change in consumer preferences.
Speaker Change: Restaurant Price Fatigue is combining with Menu Fatigue, a situation where consumers become bored or uninspired by a restaurant's menu to bring consumers back to the grocery store for both savings and variety.
Speaker Change: The February CPI highlighted these trends as a way from home inflation was up another 40 basis points while at home was flat, creating almost a 2x variance between a way from home and at home inflation over the past 12 months.
Speaker Change: In the restaurant, food service space, fish projects, food away from home spending growth to continue to slide to low single digits in 2025, down from mid single digits in 2024, driven by consumers tightening their wallets.
Speaker Change: The away from home channel still accounts for slightly over half of overall US food spending, which provides significant market potential for our deli-prepared foods to capture, particularly in recessionary environments where consumers eat out less.
Speaker Change: Mama's Creations, on the other hand, is growing several times that fast, 19.4% in fiscal 25, consistently and methodically gaining market share. So we are in the right segment of the market with the right products, at the right time, at the right price, with the right strategy.
Speaker Change: Prepared foods have continued to expand both in popularity and across demographics.
Speaker Change: A recent progressive grocers consumer expenditure study reported more than two-thirds of shoppers recently purchased deli-prepared foods and overall consumer satisfaction with prepared foods has increased.
Speaker Change: An impressive 85% of millennials made these purchases in the past month followed by 84% of
Speaker Change: The most important factor when consumers purchase prepared foods is value, followed by quality, taste, and freshness. Dare I say grandma quality remains a key component in consumer decision-making.
Speaker Change: Given these tailwinds, the opportunity we are facing is clearly significant. We're in the right place at the right time and with the right product portfolio.
Speaker Change: The Mama's Creations product offerings is, in my opinion, second to none, in variety, quality, service, and value.
Speaker Change: We are more than just meatballs, and in fact, these days meatballs are no longer our top-selling product. Grocers are recognizing that and building out their Delhi-prepared food assortment with us as their one-stop shop.
Speaker Change: To address this incredible opportunity, a short two and a half years ago, we formed an initial 3C strategy to improve our costs, controls, and culture, areas that in my opinion required the most attention. We rebuilt and strengthened the foundations of our business and became brilliant at the basics.
Our first focus was cost
Speaker Change: Back in Q2, a fiscal year 23, gross margins were just 11.9%.
Speaker Change: and through hundreds of small, meaningful changes like intentional freight management, smarter procurement actions, and strategic labor planning, particularly by reducing over time, we're now steadily back to our near term margin goal in the high 20s.
Speaker Change: Our farm and the out facility now houses new grills, paid for with cash flow from operations that more than doubles our chicken capacity and significantly reduces labor hours.
Speaker Change: Chicken Throughput in Q4 was 34% ahead of Q3 and a whopping 90% ahead of prior year. And thanks to Ray and his team, we're getting more efficient every day.
Speaker Change: We've also brought previously outsourced services, in-house, building sustainable margin improvements and reducing our reliance on external support.
Speaker Change: By moving upstream, we also open the aperture of partners we can use further driving procurement efficiencies and ensuring adequate supply of raw materials. Did I mention those beef and chicken contracts, which help to blunt against macro spikes in the market?
Speaker Change: The second C-Ctrl has seen an equally impactful transformation. Our Netsuite ERP roll out continues to enhance pricing, margin and inventory visibility.
Speaker Change: As we showed at our recent investor day, we added a warehouse management system that helps us minimize the need for large inventories, unlocking even more working capital.
Speaker Change: As one of our country's founding fathers and of my alma mater, Ben Franklin said a place for everything and everything in its place. Our warehouse magnet system does just that.
Speaker Change: In quality, new X-ray and PCR testing, build on our grandma quality promise and raise the bar on food safety.
Speaker Change: and these quality improvements are being noticed inside and outside of the company. Just last month, we received our annual unannounced Costco audit, scoring a 99.8%, a level my mother can tell you I did not reach in college.
Speaker Change: Our annual Safe Quality Foods Audits earlier this year scored 98% in East Rutherford, and a 97% in Farmingdale made that much more impressive in Farmingdale since that too was unannounced.
Speaker Change: Finally, in Q4, we kicked off Mama's first-ever sales and operations planning efforts as an OP, bringing demand and supply together to optimize our production planning.
Speaker Change: While I'll take a quarter or two to get up and running, I believe we will all look back and say our SNOP efforts were a major unlock to further gross margin expansion, let alone improvements for our customers with case fill rates.
Speaker Change: to support these improvements and strengthen our third-sea culture. We've completed the build-out of what I believe is a truly world-class senior leadership team.
Speaker Change: Chris Darling, our new Chief Commercial Officer, joins us with over 20 years of experience building iconic Delhi brands at companies like Boershead and Albertsons.
Speaker Change: He's already made a meaningful impact on the business, adding outstanding new team members and building the capabilities of our existing team.
Speaker Change: It didn't hurt that with his contact and reputation, he's already been to Cincinnati to share our portfolio with Kroger and to Minneapolis to feed our friends a target.
Speaker Change: Starting next month, thanks to Chris, you could find not one but two new items at Lidl, a first for Mama's as they took in two new sleeve items and are interested in others using the entire chicken breast, helping us to trim more and more of our own chicken in house.
Speaker Change: Chris joins Skip Tappen, our chief operating officer, who brings three decades of supply chain leadership from giants, like Walmart, Gordon Food, Service, and Campbell's.
Speaker Change: In the short time since joining, Skiff has improved labor efficiency by reworking our shift structure and brought strong project management discipline to our grilling operations.
Chris Darling: If you thought I was passionate about what gets measured gets improved, you have not spent time with Skip.
Chris Darling: Dynamic modeling is developed with Eric, Ray, and plant leadership, allows us to understand in real time the impact our sales mix and operating decisions have on our trimming operations, chicken costs and inventory management.
Chris Darling: On a personal note, my wife has said having another person in the office to geek out with on operating KPIs has helped our evening dinner conversation.
Chris Darling: I'd also like to remind everyone that with over half of our expected protein needs for the new fiscal year locked in via fixed price agreements, we have built a robust foundation to buffer near-term commodity fluctuations to the greatest extent possible.
Chris Darling: We continue to focus on selling new products that leverage our entire chicken breast, such as our cheese stuffed chicken meatballs.
Chris Darling: premium chicken strips, and new fajita and teriyaki chicken trim meals for one, which allows us to trim more often, creating a cycle of higher gross margins through significant cost
Chris Darling: By mid-year, we expect in-house trimming will support over half of our chicken needs from a small fraction today. As discussed in our investor day, the margin impact of this cannot be understated.
Chris Darling: Finally, our fourth C catapult has exceeded our expectations. In Q4, as I've shared, we got into Walmart. We are now in all eight regions of Costco as well as all Albertsons region.
Chris Darling: Q4 also saw us get our first item into Kroger's Home Chef Division.
Chris Darling: We have secured upcoming launches at Lidl, our first ever All-Eight region, Q1 Digital Multi-Vendor-Mailer, MVM, National Biocasco, as well as a major Q1 seastore launch at Sheets
Chris Darling: In Q1, we will also launch at Amazon Fresh with new technology and extended shelf life meals for one, as well as our new non-protein items at Beaches.
Chris Darling: Lauren and the marketing team continue to strengthen the Mama's brand through high return marketing initiatives and targeted digital expansion with our key retail partners.
Chris Darling: Our growing Costco business is unlocking additional value through Instacart, where in March, we more than doubled our sales record on the platform. And we continue to post a row-as or return on advertising spend of well over $5.
Chris Darling: Notably, more than 70% of our Instacark consumers are new to brand, creating a virtuous cycle of household penetration that will create dividends for years to come.
Chris Darling: We also successfully executed our second annual National Meatball Day campaign, generating 50% more entrance and newsletter signups over prior year. These consumers represent a growing, owned audience we can re-engage with cost effectively.
But organic is not our only growth engine.
Chris Darling: With this exceptional team in place, we're in the best position yet to optimize operations, scale efficiently, and pursue potential M&A, which I've been looking forward to.
Chris Darling: As we've been very vocal about our ideal target candidate for some time, we've seen an incredible amount of deal flow and are pleased with some of the opportunities we see in the marketplace.
Chris Darling: While we will never acquire a company for the sake of acquiring something,
Chris Darling: If we feel there is a fair priced opportunity that is incremental or strategic to our business, we will pursue it.
Chris Darling: But it all starts with a strong foundation and I'm incredibly proud of the one we've built.
Chris Darling: With that, before handing the call over to Anthony, I'd like to take a moment to thank our colleague, Steve Burns, our chief administrative officer and board member for his service to the company as he moves to retire from both his executive and board roles at the end of this month.
Chris Darling: Steve has been with the company since the beginning, holding the ship together and helping to ensure my onboarding was incredibly smooth.
Chris Darling: With his duties successfully transitioned to Skip and Chris and our leadership team structured for future success, he felt this was an appropriate time to retire in April 30th will be his last day.
Speaker Change: On behalf of the entire team of mamas, I'd like to sincerely wish him a happy and well-deserved retirement.
Speaker Change: Thank you, Adam. I'd like to second that and thank Steve for his hard work at the company over the years. We all wish him a happy retirement.
Now moving to the financial results.
Speaker Change: Revenue for the fourth quarter of fiscal 2025, increased 25.7% to 33.6 million, has compared to 26.7 million in the same year ago quarter.
Speaker Change: Revenue for Fiscal Year 2025 increased 19.4% to 123.3 million as compared to 103.3 million in the prior year.
Speaker Change: The increase was largely attributable to volume gains driven by the same customer cross-selling of new items. Increased ROI trade promotions to drive higher velocities in existing customers and new customer door expansion.
Speaker Change: Gross Profit increased 16.1% to 9.1 million, or 27% of total revenues in the fourth quarter of fiscal 2025, as compared to 7.8 million, or 29.3 of total revenues in the same Eurodote
Speaker Change: Roseprofit increased 0.7% to 30.5 million or 24.8% of total revenues in fiscal 2025 as compared to 30.3 million or 29.4% of total revenues in the prior year.
Speaker Change: The difference in gross margin was primarily attributable to significant commodity cost increases from historical
Speaker Change: as well as a non-recurring impact from construction surrounding the new, now completed installation of strategic cat-backs projects at the Farming Dalsacellate.
Speaker Change: In addition, we are evaluating new targeted pricing and costing actions every day in partnership with our customers and suppliers to weather macro storms as best we can while concurrently maintaining our targeted margin profile.
Speaker Change: While it's a fluid process, we have great customer relationships and pricing actions have been taken and implemented.
Speaker Change: Looking ahead, we believe that our normalized gross margin profile, not including major commodity fluctuations, will continue to hover in the high 20% range.
Speaker Change: Our long-term goal, leveraging strategic capex investments, procurement efficiencies, and continuous operational improvements, would be targeting margins consistently maintained in low 30% range, while right-sizing our trade promotion investments.
Speaker Change: from low single-digit percent of revenue today, closer to or go of 10 percent but never the expense of hitting our margin targets.
Speaker Change: Operating expenses totaled $7.2 million in the fourth quarter of fiscal 2025, as compared to $5.9 million in the same year ago quarter.
Speaker Change: As a percentage of sales operating expenses decreased in the fourth quarter of 2025 to 21.3% from 21.9% in the prior year period.
Speaker Change: operating expenses total 25.7 million in fiscal 2025 as compared to 21.4 million in fiscal 2024.
Speaker Change: As a percentage of sales, operating expenses remain flat in fiscal 2025 at 20.8% of sales.
Speaker Change: Operating expenses in the fourth quarter benefited from increased operating leverage, partially offset by strategic new hires.
Speaker Change: to build capabilities as well as a 93% year-over-year increase in marketing spend across the entirety of the fiscal year, an area of historical underinvestment.
to help drive repeatable and profitable growth.
Speaker Change: Net income for the fourth quarter of fiscal 2025 increased to 1.6 million or 4 cents per diluted share as compared to net income of 1.4 million or 4 cents per diluted share in the same year ago quarter.
Speaker Change: Net income for fiscal 2025, total $3.7 million, or $0.9 provided with a share, as compared to the net income of $0.6.5 million, or $0.17 provided with a share in the prior year.
Speaker Change: Fourth quarter net income totaled 4.8% of revenue as compared to 5.3% in the same year ago quarter.
Speaker Change: Adjusted EBITDA, a non-GAAP measure increased 8.8% to 3.1 million for the fourth quarter of fiscal 2025 as compared to 2.9 million in the same year ago quarter.
Speaker Change: Adjusted EBITOT total $9.2 million in fiscal 2025 has compared to a $1.7 million in the prior year.
Speaker Change: Our long-term goal is to achieve adjusted EBITDA margins in the teen's percentage range.
Speaker Change: Cash and Cash Equivalence as of January 31, 2025, totaled $7.2 million as compared to $11 million as of January 31, 2024.
Speaker Change: As of January 31st, 2025, total debt stood at 5.1 million as compared to 8.7 million as of January 31st, 2024.
Speaker Change: This cash war chest, coupled with our commercial lines of credit, reduced debt and a stronger balance sheet is preparing us well for whatever inorganic or organic opportunities proactively
Speaker Change: This completes my prepared comments and before we begin our question and answer session, I'd like to run the call back to Adam for some closing remarks. Adam.
Adam: Thanks, Anthony. In closing, we're entering the next phase of our journey with a sturdier ship, a more experienced crew, and a more advanced navigational system.
We've built the best in class leadership team.
Adam: made smart investments in capacity and automation, and proven that we can grow both revenue and margin in a disciplined way.
Adam: With strong customer relationships and expanded product portfolio and customer base and a healthy balance sheet, we're positioned to lead this category, not just as a participant, but as a consolidator and category shaper.
Adam: I'm incredibly proud of what our team has accomplished this quarter and year and even more excited for what lies ahead. With that, operator, let's open the line for questions.
Speaker Change: Thank you, sir. We will now begin the question and answer session for telephone participants.
Speaker Change: If you have a question, please press the star followed by the one on your touch tone phone.
Speaker Change: If you would like to withdraw your question, please press the star followed by the two.
Speaker Change: Again, that is the star followed by the one if you have a question. If you are using speaker equipment, you will need to lift the handset before making your selection. I will now pause as we assemble AEQ.
www.microsoft.com.ca
Speaker Change: Our first question comes from the line of George Kelly with Rod Capital Partners. Please receive a true question.
Everybody, thanks for taking my questions.
Um...
Speaker Change: Maybe I'll start with a couple on pricing. I was curious if you could break down your growth in 4Q by pricing and value. And then I think you said in your prepared remarks that
Speaker Change: That you were had either just taken pricing or you were planning on taking pricing and I'm curious if I heard that right now much, much additional pricing you plan taking.
Speaker Change: Yeah, thanks, George. So, your question on pricing. So, actually, probably 90 percent, definitely over 85 percent of our revenue growth was volume driven. So, really important. We are a volume driven business.
Speaker Change: We look at pricing every day. It's not something we do once a year or once a quarter seasonally. Every day we're looking at what's happening in the markets from a commodity perspective and immediately it's a big learning from
when I first got here.
Speaker Change: We take immediate action and we actually anticipate what's going on.
Speaker Change: So we've taken pricing some of that pricing has been implemented already some is going to be happening throughout the course of the month the next two months and again
Speaker Change: We're clear and we really see our customers as partners. They see the same data we do. If not, we certainly share it with them. This is all readily available data on the price of beef and chicken and when
Speaker Change: You know, beef or chicken can start to move, we immediately say look, we need another 10 cents, we need another 20 cents whatever that number is and we work collaboratively on that.
I hope this helps you.
and just brought like, [inaudible]
Speaker Change: sort of round numbers or just ballparking it. Do you plan on would this be all in like a load of mid single digit pressing increase? If you look at all, fortunately are unfortunately
Speaker Change: You know, you guys are seeing what's happening with commodity prices some of the numbers have to be even more than that and that's, um...
Speaker Change: If that's what we need to do, what's been great and actually what's been very helpful is when I first got here when Anthony and I first got here we took a significant amount and you were here from the beginning a significant amount of pricing. So what's great is we're not playing catch up.
Speaker Change: So the pricing is allowed. It doesn't have to be as crazy as people that weren't prepared for it. But no, and sometimes it has to be, you know, low double digits.
Speaker Change: Okay, understood. And then just one more question and then I'll hop back into queue.
Speaker Change: A couple of months ago at your analyst day, you offered up some guidance for this fiscal year, this upcoming fiscal year, 2026.
Speaker Change: You talked about double-digit revenue growth and then I think EBITDA margin sort of starting the year in the high single digit range and exiting in the double-digit range.
Speaker Change: As we move through the year that you'd like to flag with respect to, I don't know if there's new big customers coming on board that might sort of make the quarterly uneven or anything else that's worth flagging.
Speaker Change: So first, respectfully, Mr. George, I don't use the G word. So we did speak about, you know, on the top line, we continue to gain and we did an amazing job this year.
Speaker Change: So maybe the 10th quarter we've been doing this, we've done that. So that's definitely, you know, it's your first piece.
You'll profit wise.
Speaker Change: You know, again, I'll be just a little bit, I'll always have this caveat on...
Speaker Change: If something uber crazy goes on from a commodities perspective, you know, that will be difficult, but I think that, you know, from an EBITDA perspective.
Speaker Change: I think we actually said that the long-term goal is in the teens percentage but we should be in the double digits.
Understood. Thank you.
Thank you.
Speaker Change: Our next question comes from the line of Eric Dislouriers with Craig Hallum. Please be for see with your question.
Eric Deslauriers: Great. Thank you for taking my questions and congrats on yet another strong quarter here. So my first two questions are kind of around commodity pricing and these protein contracts, certainly.
Eric Deslauriers: Good timing, with locking in some fixed pricing here. So just first on
Eric Deslauriers: Greater price increases on breasts versus other parts of chicken. And if you have any views on how that may trend throughout the year, obviously a bit of a crystal ball question at the end there, but just wondering your views on chicken breast pricing versus chicken pricing in general. [inaudible]
Eric Deslauriers: Yeah, so I'll say a couple things. So the first thing is, you know, again, beef actually is still a higher commodity than chicken, right? So as people have less funds.
They moved to a cheaper commodity and chicken.
At least for now, it's still there.
Eric Deslauriers: So that's one element to it. There's competition also, so fast food, I'm sure.
Eric Deslauriers: of your body's a temple, but other people know that, you know, I think McDonald's just came out with a chicken's big Mac and a lot of the other fast food places.
Eric Deslauriers: They're taking a lot of the supply, so obviously we know supply is demand is up, that's not good. Second, the third thing is the element that...
Eric Deslauriers: You know, somewhat I don't this is a smaller piece of it everyone talks about the the avian flu and everything that's certainly hurt eggs
Eric Deslauriers: We know not enough time now to go into the difference between a there's actually the egg chickens are different than the broiler chickens, but there is a little bit of that I think overall a little bit it it's just there's just so much talking about it and it is given the producers. the producers.
some freedom to raise prices possibly somewhat artificially.
Um.
Speaker Change: So, we are planning. It is difficult right now. Like you said, and Anthony Morello and team gets all the credit for getting us into a contract that is massive for us, that we have locked in more than half our demand. The fact that we're trimming now.
Speaker Change: That allows us to buy from more places and buy the jumbo which is more readily available versus having to buy portion chicken. That also helps us.
Speaker Change: So while I always have to go in with the planning of the worst case, which is chicken will continue to go up.
Speaker Change: I know that this team has done an incredible job to blunt a lot of that and you know we're seeing it
Speaker Change: Our business is holding for lack of a better word to you know as chicken prices keep going up the last thing and it goes into Georgia's question. We're not bashful this time around on if as prices go up again this is a. So we're going to do that.
Speaker Change: We go to our customers immediately and say, look, this is where we are. We need to raise prices or very important, or I just can't sell it to you.
Speaker Change: So I will tell you, hopefully I've been consistent with all of our investors that we have to make a margin. I do tons of non-profit work
That is at night.
Speaker Change: During the day, our job is to make a profit. And if the customers are not able to meet us on pricing, then we're going to have to find, you know, customers that do.
Speaker Change: What's wonderful is that a lot of new sales, you saw some of it in the press release, I could talk to you literally all day about all the new work that Tony and Scott and
Speaker Change: and Chris and team are doing to get us more sales and that actually allows us to be a little picky, right? So I don't love it, but the teams do in a great job managing the chicken commodity prices.
Is that helpful?
Speaker Change: Yes, yeah, and that was very helpful, thank you for that. And then just as kind of a follow on here.
Speaker Change: So you guys are contracted for now, over half of your protein needs. I think that might be a slight increase in the last time you You spoke on that topic, but just in general, what if you can kind of drill down on that a bit more like should we think of this as
You know, 50% plus of your-
Speaker Change: Protein purchases every week or month are a fixed price and the balance is spot or is it more like you guys are contracted for the first. [inaudible]
Speaker Change: six months and the last six months are supposed to to spot pricing, this one if you can kind of drill down into, you know, what exactly being contracted for 50% of your needs.
Meyers,
Speaker Change: No, that's great. And you're totally in my head. So first of all, this is all your long. This is a year-long contract and it's spread out. So every single week we get, you know, ex palates of chicken. So the good news is this is for the entire year till December 31st.
Speaker Change: What that means, and actually I just had a conversation with Scott just before this call, what that means is we like to spread out so you're not allowed or we won't let you as a customer buy a hundred dollars today and nothing for the next three weeks and then buy a hundred dollars next month.
Speaker Change: It's all spread out. We get a load every single week.
Speaker Change: Well, multiple loads every single week, so it allows us a very smooth, gross margin profile. I am all about consistent.
see you next time.
Speaker Change: That's very helpful and good to hear as well. Last question from me, so obviously utilizing the breast trimmings is going to be a big driver of your gross margin or at least product margin improvement throughout the year. You've laid out this.
maybe just any kind of comments on
Speaker Change: You know, how those are fairing in the market right now, and maybe how much
Speaker Change: When you look at your total distribution, like, how penetrated are you with these new products now, and how will that change by maybe here to help get you to that majority of chicken in terms of the house?
Speaker Change: Yeah, it's wonderful. So two elements. The first one is let's be clear from an operation inside. We could do all five days, six days immediately. So from an operations perspective, Skip and Ray and his team have prepared us properly. We have and actually you saw Eric that the trimmers, multiple trimmers, [inaudible]
Speaker Change: So we're in great shape operationally. The question is can we actually sell the products?
Speaker Change: and with Chris coming in and Scott and team it is actually pretty incredible how fast at least who's
Speaker Change: They're beating my personal expectations on getting items in. So you tried, we had an amazing rotation at Costco last month in the Midwest with our chicken stuffed meatballs.
Speaker Change: They flew off the shelves. They literally went faster than we expected. Velocities were higher, and there's talk about expanding that. That is pure trimming. That's pure bottles. We are already shipping right now brand new to Albertsons.
Speaker Change: Strips, these roasted strips. It's my new favorite meal. I brought them home for my kids barbecue chicken strips.
Speaker Change: That's all bottoms. We're doing that already. So we just got in and we start actually next month new Fahida items at BJ's
which is the same strips.
The trimming, the new MFOs are starting to go out.
So, um...
Speaker Change: That was too long-winded, I apologize. We're doing an amazing job beating my personal expectations, but still massively underpenetrated. There's tons of space for these to go to, but it seems every time we bring them, I mentioned to you the new leadal items.
Speaker Change: That is using the bottom of the chicken. So there is, you know, I'll tell you what, not that I did wrong, but last year we didn't tell the sales team to go sell them, right? Because we didn't have it all prepared.
Speaker Change: This year it was the first thing at our strategy sessions back in November to prepare for the year. This was the year of the chicken bottoms and this is doing an amazing job focusing his team and this is every he just keeps knocking them down every time he goes.
Thank you for watching!
Speaker Change: All righty, that's very good to hear and appreciate you taking my questions, congrats again on the strong core.
Thank you, sir, and team effort.
Thank you.
Speaker Change: And as a reminder, if anyone has any questions, you may press star in the number one to join the queue.
Speaker Change: Our next question comes from the line of Nicholas Sherwood with Maxim. Please proceed with your question.
Nicholas Sherwood: Alright, good evening and thank you for taking my questions. My first question relates to the rollout at Walmart locations. It started with two skews at 2000 stores. Is there any increased demand to add more skews to that rollout or increased the store count? Can you kind of give us an update on how that's been proceeding? [inaudible]
Chris Darling: Yeah, thanks, Nicholas. It's been going well. Actually, we hear back from Walmart that it's actually a top seller for them in that set, which is wonderful.
Speaker Change: I mentioned to you earlier the success we're having with the online and the ROAS improvements that we're getting on the marketing efforts that Lauren's doing.
Chris Darling: We have increased actually from a four count perspective, but you know I'm really focused on it and again just like all the items
Chris Darling: Chicken's Tough, and we got to get the pricing on the items.
Chris Darling: We're in conversations with them. We continue to do more. They continue to ask for more. I feel good. I feel like a but it's a slow and steady. That's the reason why we didn't go into all of them at once
Speaker Change: Understood. And then my next question is related to trade promotions. I noticed that it looked like trade promotion was down quarter to quarter, and then also year over year. Can you talk about how, you know, I know increasing trade promotions, one of the key growth drivers that you laid out to us.
Speaker Change: Are you planning on ramping that up in the first half of this fiscal year and also how is some of that trade promotion interacting with the pricing that you've taken recently and you're planning to take in the next couple of months?
Speaker Change: I love that. See that? The dollar I gave you to ask that question was perfect. There you go. So, so I hope, you know, I tell you guys that I say what I'm going to do and I do what I'm going to say.
Speaker Change: I told you guys we wanted to do more in the trade promotion space, right? We wanted to get up. My aspirations get closer to 10%. I equally told you when I did not have the margin.
We weren't going to do it.
Speaker Change: I got to get to these high 20s numbers and what you see is absolutely correct. We went down from about 2.6% in Q3 to 2.1% in Q4 and that's just because we just didn't have, you know, I felt good with the team felt good with the 27% but I just wanted to be more measured.
As we get stronger and drive more gross margin.
We can actually invest more in the trade.
Speaker Change: So it's something that I absolutely want to do. Chris is very passionate about investing. Lauren's passionate about investing in the marketing side of the house, but we can only do that if we have the gross margin to support it.
Speaker Change: Yeah, so hopefully I didn't say, hopefully I didn't say that there's no impact. I appreciate it, hopefully.
Speaker Change: I'm smart enough to know that eventually there'll be secondary interciary. Hopefully what I was clear on is from a primary perspective, from a perspective of our biggest supplies are chicken and beef. That is all domestically sourced. Most of our other ingredients are all domestically sourced. But in time it's been...
If you knew the answer, please tell me. I don't.
Speaker Change: You know, I don't know what's going to happen with all the tariffs, but what we're doing and we have Alberto here to lead our procurement efforts.
Speaker Change: We're very proactive. We've been speaking about this for many, many months now, we've actually moved stuff around, but what I can tell you is right now, we're not seeing it impact our business.
Speaker Change: We're very good at multi-sourcing, we're very good at most of our suppliers are domestic, nearly all of our suppliers are domestic
Speaker Change: We're holding strong, and again, I guess the planning has helped.
Speaker Change: From an equipment perspective, again, same sort of thing. I just had a conversation with Eric just a few hours ago. We're very proactive. We actually plan for maintenance, preventative maintenance. So we know our top machinery.
Speaker Change: to make sure that we have them, if needed. So, again, that further...
Speaker Change: Wanted us from any near and tariff concerns because we have the pieces that we need right now.
Speaker Change: Awesome. Thank you for writing all that detail and I'll return to the key.
Thanks, Nichols.
Speaker Change: Thank you. This concludes our question and answer session. I'll now hand the call back to Chairman and hear Adam, no mic, before his closing remarks.
Speaker Change: Thank you, operator, and thank you again to each of you for joining us today.
Speaker Change: We look forward to continuing to update you on our progress as we strive to deliver value to my fellow shareholders and execute upon our vision of becoming a leading national one-stop shop deli solution provider. Thank you.
Speaker Change: And ladies and gentlemen, this does conclude today's teleconference. Thank you for your participation. You may now disconnect your line at this time and have a wonderful day.
Anthony Gruber: George Kelly, Anthony Vendetti, Ryan Meyers, Eric Lauriers, Unknown Executive, Nicholas Sherwood, Anthony Gruber,