Mama’s Creations (NASDAQ:MAMA) held its first-quarter earnings conference call on Monday. Below is the complete transcript from the call.
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Summary
Mama’s Creations reported a 50% increase in revenue to $52.8 million for Q1 FY27, with net income rising 66% to $2.1 million and adjusted EBITDA growing 71% to $4.9 million.
The company successfully launched over a dozen new items with major retailers, including Walmart and Target, and completed the integration of Bayshore into their ERP system, enhancing operational efficiency.
Mama’s Creations maintained a strong balance sheet with $24.4 million in cash and $5.1 million in debt, positioning them well for future growth and potential M&A opportunities.
Management highlighted strategic initiatives such as the expansion of their retail footprint, the introduction of new packaging technologies, and a focus on the fresh perimeter and prepared foods market.
CEO Adam L. Michaels stressed the importance of the company’s cultural and operational framework, the ‘4C’s,’ and noted their commitment to becoming a leading national deli solutions provider.
Full Transcript
OPERATOR
Good afternoon ladies and gentlemen. Thank you for standing by. Welcome to Mama’s Creations first quarter fiscal 2027 earnings conference call. During today’s presentation, all parties will be in a listen only mode. Following the presentation, the conference will be open for questions. This conference is being recorded today, June 8, 2026 and the earnings press release accompanying this conference call was issued after the market closed today. On our call today is Mama Creations Chairman and CEO Adam L.
Michaels and CFO Anthony Gruber. Before we get started, I’d like to note that some of the statements on this call will be forward looking statements that reflect management’s current expectations about future operating and financial results. Although management believes their expectations and assumptions are reasonable, they remain subject to significant risks and uncertainties and actual results for future periods may differ materially from what is stated or implied during today’s call.
For more information, please refer to the Forward Looking Statements section in today’s press release and the risk factors disclosed in the company’s Most recent Form 10-K and any subsequent reports it files with the SEC. Please also note that today’s call will include a discussion of adjusted EBITDA, which is a non-GAAP financial measure. Important information, including required disclosures containing a reconciliation to the most directly comparable GAAP measure, is also detailed in today’s press release.
At this time I’d like to turn the call over to Chairman and CEO Adam L. Michaels. Adam, the floor is yours.
Adam L. Michaels (Chairman & Chief Executive Officer)
Thank you Luke and thank you to everyone for joining us today. I’d like to welcome you to our first quarter fiscal 27 financial results conference call. Fiscal 2027 is off to another strong start. We grew revenue 50% to $52.8 million in the first quarter, grew net income 66% to 2.1 million and expanded adjusted EBITDA 71% to $4.9 million, all while successfully lapping without repeat a nearly $10 million digital Costco MVM (multi-vendor mailer) in the prior year.
First quarter growing on top of that comp with meaningfully less trade investment is frankly a remarkable accomplishment and one that I believe speaks volumes about the durability and breadth of the demand we are seeing across our customer base, the strength of our brand and innovation pipeline, and the execution of our integrated three facility platform. Beyond the headline numbers, what excites me most is the strategic position we now hold. We entered fiscal 27 as a scaled platform with three facilities, a diversified and growing customer base, a fortified balance sheet and a clear path towards our long term vision of becoming the leading national
one stop shop Deli Solutions provider. The first quarter validated every element of that thesis. Before we dig into the quarter, let me spend a moment on the macro backdrop. One of the earliest lessons I picked up in my career is that catching an existing current is far easier and far cheaper than trying to manufacture one of your own. And in the deli prepared, that current is still building into what I’d call a tidal wave. Progressive grocers just released 93rd annual report in the 2026 State of the Industry Survey validates exactly what we are seeing every day at Mama’s.
Among grocery retailers surveyed, 79% said that the meat department is the most successful at generating sales, a remarkable 30 percentage point increase from last year. Said differently, in the span of a single year, meat and more broadly, protein has gone from a category retailers manage to a category retailers expect to grow with 77% of retailers further told Progressive Grocer that prepared foods and food service represents a top strategy for merchandising and brand enhancement, underscoring the growth opportunity this year in the Fresh Perimeter and Prepared Foods, the very intersection where Mama’s competes every day.
And 89% said that private label and store brands are a top merchandising strategy, a 16 point percentage point increase over last year, reinforcing the relevance of our dual track approach of growing both our branded and private label portfolios. Last month, Food Marketing Institute (FMI) came out with their annual US Grocery Shopper Trends 2026 and reinforced and put math to this title wave. We’re seeing 70% of respondents visit the deli department at least once a month and 1/3 visit at least weekly.
In our target demographic, 38% of Gen Z and 43% of millennials buy deli prepared foods at least weekly. They’re more likely to buy deli prepared foods to save money and to eat healthier, suggesting deli prepared foods tends to replace dining out more often. Deli prepared departments offer shoppers an opportunity to explore and take a break from their everyday routines. This is what I foresaw nearly four years ago and why this highly overqualified team we have assembled at Mama’s was willing to plant those early seeds.
I could tell you these green shoots have already turned into vibrant saplings. Layered on top of these survey findings, fresh format grocers continue to capture the largest share of incremental foot traffic, with grocery stores grabbing a growing share of short midday visits from quick serve restaurants as consumers replace restaurant meals with more cost conscious and healthier options. Meat sales remain at record highs with consumers increasingly viewing high quality meats and poultry as part of a healthy diet.
We continue to be in the right place at the right time with the right product portfolio and we now have the platform to capture far more than our fair share. The last three and a half years have brought meaningful progress and laid down a durable base from which to construct a category leading deli platform.
But the underlying playbook we run against our 4C’s framework has not shifted one iota. Starting with our first C cost, the Bayshore integration continues to be the clearest illustration of the structural margin work Skip and his team are driving. Sourcing and logistics are now run from a single centralized desk covering all three plants. Bayshore successfully transitioned to MAMA’s corporate Enterprise Resource Planning (ERP) system, providing unparalleled insights across the business.
Our production footprint has been reflowed to lift utilization, take out overtime and pull more absorption through the system. Bayshore Associates have leaned into the mama’s way of doing things and we in turn are picking up best practices from them. In particular, the premium product know how they brought with them is already unlocking customer doors that have previously been closed to us. I am so excited to share that we have officially moved into our new East Rutherford expansion adjacent and literally sharing a wall with our existing facility.
While there is more work to do, additional blast freezer and refrigerated storage is currently being installed allowing for more efficient runs, lower overtime and better customer service. I am so proud of Shane and the team from our project managers to line workers who execute our major projects faster than the time before and further below budget on gross margin. Specifically, Q1 reflected some labor and raw material inefficiencies and other startup costs associated with with the launch of new packaging technologies and protein form factors that we deployed to support the introduction of over a dozen new items with major retailers in the quarter,
the most ever in a single quarter for mamas. These are investments in our future and they are exactly the kind of front loaded cost you would expect to see as we scale our business. Bayshore’s gross margins continue to improve since acquisition and we remain on track to bring that facility and the consolidated business in line with our mid to high 20s corporate target as these new items move from launch into steady state production, moving to controls our second C In an industry where food safety sits at the top of every conversation, the discipline our team is demonstrating across all three facilities is nothing short of remarkable and is nothing
we take for granted. This quarter saw two successful FDA unannounced audits and while some companies fear and dread these types of audits, the only thing our team thinks to say is bring it on. Our team loves these opportunities to show our customers and the entire country what they are used to doing every single day. For me and Skip, the best part is seeing our colleagues across facilities share learnings, highlight best practices so their sisters and brothers can do even better than they did.
If that does not describe a family, I do not know what does an important milestone underpinning our controls discipline this quarter was the completion of our Enterprise Resource Planning or Enterprise Resource Planning (ERP) integration across all three of our manufacturing facilities. With Bayshore now fully transitioned onto the same enterprise platform that runs East Rutherford and Farmingdale, we operate as a single unified system for procurement, production, inventory and sales.
The benefits are already showing up in how we run the business, a faster month end close, sharper inventory accuracy, more granular cost visibility by line and by sku, and a stronger foundation for our analytical tools. This integrated Enterprise Resource Planning (ERP) backbone is a key enabler of the operating leverage you’re starting to see come through our financials, an important capability as we continue to scale towards our $1 billion vision.
A huge thank you to John and his IT team as well as to Tony and his Bay Shore team for the long hours planning, execution and hypercare you both partnered on to deliver on time and on budget. Thank you. In addition to our Enterprise Resource Planning (ERP) system, we’ve also advanced the implementation and capabilities associated with our Warehouse Management System (WMS) or Warehouse Management system impacting areas of labor efficiency, stock location and inventory accuracy.
We also successfully introduced and implemented the company’s first ever Transportation Management System (TMS) or Transportation Management System which will be a huge unlock for transportation planning efficiency, improved route and stop optimization, improved On-Time In-Full (OTIF) and service visibility, Request for Proposal (RFP) capabilities and carrier compliance. Not to mention Rebecca finally retiring her letter size dry erase board with the map of the United States.
Skip would have me go on and on about the tools and capabilities we have successfully implemented at Mama’s over the past 12 months, but I hope this gives our investors just a taste of the technology we’re bringing in, well ahead of similarly sized companies, let alone a company in the deli prepared space. As our boys Gregory and Alexander would say, we are just built different. As I have said in the past, cost and controls may earn us a seat at the table, but it is our third C culture that keeps us there.
With nearly 600 teammates now operating across three facilities, the Enterprise wide shared services model we put in place is producing real, measurable results. As Abby continues to tell me, culture is not a destination but rather a mindset that always needs love, attention and reinforcement. Q1 saw the launch of three employee engagement, recognition and retention programs to do just that. Grandma’s Table our first Cross Facility Referral and Retention program, Mama’s Welcome Crew and First Taste enhanced onboarding and orientation processes with primary or buddy assignments for new hires, and a Grandma’s Favorite Spot recognition program designed
to reinforce culture, engagement and positive employee experience. Yes, the customers we capture, the new items we develop, and margins we enhance are needed for a strong business. But I can honestly tell you that the P and L is missing our most important ingredient. It is the team we’re hiring. Nurturing, promoting that is truly the secret sauce of our $1 billion destination.
Our catapult strategy, our fourth and final C was on full display this quarter. In addition to strong velocity acceleration and high ROI programming, we launched over a dozen new items with major retailers, including new branded SKUs at Walmart, Target and Food Lion, supported by the startup of new packaging technologies and protein form factors. These wins are the direct result of our continued investment in product innovation, our integrated operating platform, and our deepening partnerships with the largest grocers in the country.
We expect these placements to ramp meaningfully through the balance of fiscal 27.
If I may, let me spend a moment on Costco, which continues to be a marquee example of our catapult strategy in motion. As a reminder, Q1 of last year included our first ever digital MVM (multi-vendor mailer) at Costco, which alone delivered nearly $10 million in revenue in that single quarter, incorporating meaningful trade investment to successfully drive household penetration and step change velocity acceleration that exceeded expectations. The important point is that we lapped that $10 million comp on a whole company basis year over year, adjusting out our recent acquisition.
And this was without any incremental Costco programming. In other words, this is not a story of Costco growing on top of itself. This is the entire enterprise stepping up on top of last year’s higher promotional base. To me, that is one of the strongest signals you could ask for. It tells us that the Costco business itself has become structural rather than promotional. The everyday item status we secured in the Northeast late last year is delivering exactly the steady state planable volume we expected, and at the same time, the rest of the business has grown into a much larger and more diversified contributor.
Oh, and I forgot to mention that Chris just shared with me that earlier last week we were told that the San Diego region of Costco, actually the last holdout to ever offer us a rotation back in 2024, has decided to take our beef meatballs on as an everyday item the second region to confirm our everyday status. Maybe Anna Mancini really was onto something 105 years ago when she made her way to Ellis island with her now famous meatballs and sauce recipe.
We continue to make progress against our goal this year of adding at least two new SKUs to each of our top 10 customers. In addition to Walmart, Target and Food lion, we saw successful new launches across three Albertsons divisions, two new panini items at Weiss, two non protein items at Fresh Market, as well as a number of new wins in the convenience and meal kit channel. I am so proud of Chris and his entire team not just for the individual wins but rather how they prove out quarter over quarter that our one stop shop strategy isn’t just theory but an intentional roadmap for our success for years to come.
A key driver of our catapult success continues to be our commitment to quality. Our NAE no Antibiotics Ever Chicken initiative continues to resonate with today’s consumers and we’re leveraging the Bayshore acquisition to cross sell capabilities and new products into both our legacy accounts and our Crown One customer base. Lauren and her marketing team are also delivering in a meaningful way. Our investment in marketing and retail media continued to compound in Q1.
We delivered strong returns across our top retailers while continuing to bring new customers into the brand. On Instacart. Our Northeast Everyday and rotational businesses carry the momentum forward. We grew total platform sales to over a million dollars with units up 34% delivering a 5.6x return on ad spend and 45% of our sponsored sales came from new customers at Walmart. Our branded launches went live in April and early platform results are strong.
In the quarter. Attributed sales more than tripled year over year growing to nearly $1 million. With our ROAS expanding from $10.5 last year to $29.5 meaning every dollar we spent in Walmart Media returned roughly $30 in retail sales. BJ’s was another standout. Attributed sales were up nearly 10x year over year and our ROAS grew nearly 5x. The team is scaling that program efficiently and we see meaningful room to continue looking ahead. With new items now on shelf across Walmart and Target and our activation calendar running through the back half of the year, we expect this media retail momentum to continue driving trial, repeat and branded growth.
Looking to the balance of fiscal 27, we are planning to meaningfully increase our branded sales across our retail footprint. Through the ramp of these new introductions at Walmart and Target, the conversion of legacy private label items to branded and the continued execution of our strategic goal of adding net 2 SKUs in each of our top 10 accounts. Our trade and marketing investments are delivering strong returns with digital and in store programming generating measurable lifts in consumer awareness and retail velocities.
Looking forward, the company I see in front of me bears very little resemblance to the one we ran and even 12 months ago. We now operate a scaled three plant manufacturing footprint, serve a broader and still expanding customer roster, sit on a fortified balance sheet with meaningful firepower for M and A, and rely on a team that has demonstrated in practice, not in theory, that it can integrate acquisitions and execute with excellence against the plan.
Our line of sight to $1 billion in revenue has never been sharper and I have real conviction in our ability to compound profitable growth well into the future. I’d now like to turn the call over to Anthony Gruber, our Chief Financial Officer, to walk through some key financial details from the first quarter. Anthony thank you Adam Moving to the
Anthony Gruber (Chief Financial Officer)
financial results, revenue for the first quarter of fiscal 27 increased 49.7% to $52.8 million as compared to 35.3 million in the same year ago quarter. The increase was primarily due to item expansion at existing customers, the successful launch of over a dozen new branded items at major retailers, the contribution of the Crown One acquisition and continued broad based growth which the company achieved despite lapping a $10 million digital Costco MVM in the prior year quarter and meaningfully less trade investment in the current quarter.
Gross profit increased 35.3% to $12.4 million or 23.6% of total revenues in the first quarter of fiscal 27 as compared to $9.2 million or 26.1% of total revenues in the same year ago quarter. The first quarter gross margin was impacted by labor and raw material inefficiencies and the startup of new packaging technologies and protein form factors supporting the launch of more than a dozen new items with major retailers as well as the continued integration of the Bayshore facility.
We remain on track towards our mid to high 20% corporate gross margin target as these new items transition into steady state production. Operating expenses totaled $9.8 million in the first quarter of fiscal 27 as compared to $7.6 million in the same year ago quarter as a percentage of revenue. Operating expenses declined to 18.5% from 21.6% in the prior year quarter, demonstrating the operating leverage in our model as we scale, as well as intentional decisions to move some SG&A marketing investments into gross-to-net trade to support our new item launches.
The change in absolute dollars was partially due to the Bayshore acquisition, new digital strategies and enhanced product marketing, new management hires and further technology upgrades to drive actionable insights faster and deeper into the organization. Net income for the first quarter of fiscal 27 increased 66.3% to $2.1 million or $0.05 per diluted share as compared to net income of $1.2 million or $0.03 per diluted share in the same year ago quarter.
First quarter net income totaled 3.9% of revenue as compared to 3.5% in the same year ago quarter. Adjusted EBITDA, a non GAAP measure, increased 71.2% to $4.9 million for the first quarter of fiscal 27 as compared to $2.8 million in the same year ago quarter. Cash and cash equivalents as of 4-30-26 totaled 24.4 million as compared to $20 million as of 1-31-26. This increase was primarily driven by improved profitability, strong operating cash flow generation and ongoing working capital optimization.
As of April 30th 26th, total debt stood at $5.1 million. The robust balance sheet combined with our credit facilities and strong cash flow generation positions us extremely well to pursue the organic and inorganic growth opportunities that Adam described. This completes my prepared comments. Now, before we begin our question and answer session, I’d like to turn the call back to Adam for some closing remarks. Adam
Adam L. Michaels (Chairman & Chief Executive Officer)
thank you Anthony. As I reflect on the first quarter, what stands out most to me is not any single number, but rather the way every part of our nearly 600 person team executed against the playbook. The four C’s cost controls, culture and Catapult is no longer aspirational language at Mama’s. They are the operating cadence by which we run the business. Cost discipline showed up in the Bayshore integration, in our centralized procurement and logistics and in the more balanced production footprint controls showed up in the completed three facility ERP integration, in the expansion of our power, Business Intelligence (BI) analytics and in the food
safety standards our team upholds every single day. Culture showed up in Mama’s Pantry, Mama’s University, Grandma’s Table First Taste Orientation and in the shared services backbone now linking all three sites. And Catapult showed up in the new customers we’re partnering with for the first time. New items that bring new flavors, functions, form factors to our end consumers and to our marketing partners that help us bring Mama’s story to new to brand households across this great country.
As I turn the page to the balance of fiscal 27. Our priorities are consistent. First, we will continue to optimize the integrated three facility network, pulling efficiency, margin and capacity utilization forward as our recent new item launches move into steady state. Second, we will press the accelerator on retail distribution leading into the Walmart and Target ramps while continuing to deepen our partnerships in the club channel with Costco, Sam’s Club and BJ’s Wholesale Club.
And third, we’ll use our strengthened balance sheet to selectively pursue accretive acquisitions that bring incremental capabilities, capacity or customer access into the platform. The $40 billion deli prepared foods category is large, still expanding and remains highly fragmented. The consumer trends, fresher formats, higher quality proteins, value oriented meal solutions continue to break in our direction. Retailers in turn want a partner who could simplify the deli prepared meal space, deliver consistently at a national scale and bring genuine innovation to the case.
That is precisely the role Mama’s Creations is built to play and our long term vision of becoming the leading national one stop shopping deli solution provider has never felt more within reach. With our strengthened platform, fortified balance sheet and demonstrated track record of execution, we are better positioned than ever to capture this generational opportunity and to compound value for our shareholders over the long term. To our team across all three facilities, thank you for your energy, the ownership and your relentless execution.
And to our shareholders, thank you for your continued trust in this story. I have never been more convinced that the most exciting chapter of Mama’s creation is the one in front of us with that operator let’s open the line for questions
OPERATOR
we’ll now be conducting a question and answer session. If you’d like to ask a question, please press Star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up the handset before pressing the star key. One moment please while we poll for questions. Thank you. Our first question is from Brian Holland with DA Davidson.
Brian Holland (Analyst at DA Davidson)
Thanks. Good afternoon. I wanted to start with the contribution from some of the new products in the quarter. Just curious because I thought maybe some of that was geared towards the end of the quarter. So even qualitatively, can you help understand how meaningful the contribution from those new items across at Walmart and then the new customers, Target, Food Lion, et cetera, how they contributed in the quarter. And I guess where I’m going with this is would the expectation be that revenues would increase sequentially in 2Q versus 1Q and if not just Any caveats that I’m not thinking about?
Adam L. Michaels (Chairman & Chief Executive Officer)
Yeah, thanks, Brian. I guess actually let’s call it double hit. So you’re absolutely right. So these didn’t launch till the middle to end of April. So we had all the costs. Right, because we built it all out and we got them there. The cost is all in Q1, but really very little of the revenue was in Q1. So hopefully that gives some direction. Obviously we expect we’re already seeing it in the items. We’ve been more efficient. Right. Literally. You know, I’ll give you one example.
Walmart. The first round of chicken items that we gave. We have three new items in Walmart at chicken. The first round actually had two labels on it. That’s how we originally did it. We optimized with Walmart and now if you go into the store, you’re seeing one label. We literally cut our label costs. Not just the label, remember it’s the labor in half and that’s just the first round. So we’re already starting to see lower costs and obviously the acceleration, the velocities are already increasing substantially.
So hopefully that’s helpful. That is helpful.
Brian Holland (Analyst at DA Davidson)
Appreciate the color.
You may have answered my second question in that answer, but I’ll ask it anyway as I got on the call
just a few minutes late, so apologies
if you detailed this in your prepared remarks, but maybe just going back right to that point on the gross margin and seeing all the costs and, and not seeing the revenue. I know when you and I spoke at the end of the quarter, you talked about, you know, hey, the first couple of times we run these lines through, we learn a lot, we implement it and then hopefully we improve.
So I guess just confirming that we are now past all of that and we do indeed have evidence that these lines, after the first initial runs of some of the new products, that everything is operating exactly as you would anticipate or close to.
Adam L. Michaels (Chairman & Chief Executive Officer)
Yeah, no, absolutely. And hopefully that very hopefully colorful example on the Walmart labels is a real example. That helps. But yes. And again, we’ll keep getting better and better, right, Skip. You know, Skip and I will never be satisfied. But certainly the beginnings of it, you know, another one, we just got new items into Shaw’s, which is in Albertsons division, and it’s this great shredded chicken. It’s actually my new go to lunch. You know, it took forever, right?
Is it too shredded? Is it not shredded enough? Is it too colorful? Is it not colorful enough? So there was a lot of those iterations. Now that we have it for the next Customer. Obviously we don’t have those startup costs. So the answer is yes, absolutely. We’re seeing it a lot better than we were before from a margin perspective.
Brian Holland (Analyst at DA Davidson)
We’ll leave it there. Congrats. Keep up the great work. Thank you, sir.
OPERATOR
Our next question is from Eric Delorier with Craig Hallam Capital Group.
Eric Delorier (Analyst at Craig Hallam Capital Group)
Great. Thank you for taking my questions. Congrats on the impressive broad based growth. And now the second everyday item win in San Diego. My first question here is a bit of a follow on to just understanding the sort of startup costs of these initial new products. Could you just expand on kind of what those costs were?
So we think of this as basically building inventory that you hadn’t yet sold or was there any new equipment that essentially had low initial capacity utilization? Just kind of how to think about that more broadly and then how to think about the overall sort of duration of this low margin ramp period before steady state production.
Yeah, so I think, you know, I
Adam L. Michaels (Chairman & Chief Executive Officer)
think that it was a combination of a couple things. So we used some new technology, right. We actually used some HPP technology which helped clean, you know, naturally extend shelf life. You know, that was the first time that we’ve done stuff like that. So there was a lot of back and forth, multiple touches. So I’d say a lot of it had to do with labor. Right. Us learning how to use this new packaging. I’ll give you another colorful example. Hopefully.
So in the past, so with Food lion, our chicken is in trays, right. We’re used to that. We do that with other things. Right. Remember all the meals. For one, this is the first time at Walmart we used sort of a see through because our product is beautiful, sort of a vacuum sealed plastic. Shall we call again? That was new stuff. We had some new machinery the team had to learn. Right. They keep getting more and more efficient. We see the throughputs increasing a lot.
I gave you examples of the labels. So yeah, there’s a lot of both the packaging, the technology, the form factors. Like I gave the example of the shredded chicken. That’s the first time this is something that Crown had the technology for, but we haven’t used a lot. So again, the great thing about it is these are more one time things that obviously Anthony and I have the luxury. We’re a month ahead right. Of these numbers and we’re already seeing the improvement.
So huge congratulations to Skip and his whole team. The Bayshore folks are leading the charge. Right. So one of the things that I shared with you last quarter is we have this amazing Bayshore facility. It’s twice as big as the other facilities with almost half the volume. Guess what that meant. Guess where all the Walmart items are being produced. Guess where all the food lion items are being produced. So we’re able to improve the absorption in Bayshore and it’s going exactly as we had planned.
It’s beautiful.
Eric Delorier (Analyst at Craig Hallam Capital Group)
All right, that’s very helpful. Great color. Thank you for that. And then just touching on Bayshore here. So ERP conversion integration now complete. Certainly great to see. Those are no walk in the park. Is there anything that remains on the integration front for Bayshore? And what kind of capacity does this kind of free up for the senior management team?
Is this more freeing up, more time to focus on M and A, or should we sort of be looking for any step up in gross margins or operating leverage? Maybe it’s a bit of all the above, but kind of just give us a status quo on the Bayshore integration and kind of how to think about the implications there. Thank you.
Adam L. Michaels (Chairman & Chief Executive Officer)
Yeah, I mean, that was absolutely the last major step. And kudos to Anthony. Anthony led the charge with John Dillon and his team. Look, it’s scary, right? I’ve done it at a number of different places and it’s, you know, you don’t need me to tell you how dangerous it could be. We crushed it. It was absolutely perfect. Let’s keep in mind, I think I shared that, you know, this was going to happen mid to end of summer. We actually did this ahead of schedule.
And that’s a testament to the integration that Skip is leading in Bayshore. Look, like I said before, I’m never going to stop improving this business. But there is nothing major left to do it at Bayshore. That was the last major hurdle, as my team knows. I think I’m on the road literally the past two weeks and the next two weeks, some for investor stuff, some for other stuff. And I am a lot more confident now and a lot easier for me to travel because that last hurdle is done.
Again, Skip remains the boss and he has told me I’m allowed to leave the office now. More so. I feel a lot better that again, there’s always more to do and will be more to do, but that was the last major hurdle at Bayshore with the integration.
Eric Delorier (Analyst at Craig Hallam Capital Group)
Good stuff. Appreciate that color. And congrats again on all the progress. Thank you, Eric.
OPERATOR
Our next question is from George Kelly with Roth Capital Partners.
George Kelly (Analyst at Roth Capital Partners)
Hey, everyone, thanks for taking my questions. So first one, another question for you on this gross margin, kind of inefficiencies related to the startup costs. Are you able to quantify that? Maybe it’s too hard, but is it possible to give any numbers around that?
Adam L. Michaels (Chairman & Chief Executive Officer)
Yeah, you know, I think there’s two sets of numbers. I think roughly, you know, I’d say there’s probably somewhere between almost 500,000 to, I don’t think a million. But in that range from a labor and raw material inefficiency, there’s probably half a million dollars of. As Anthony mentioned, we made an intentional decision and Lauren’s still upset with me, but we took about half a million dollars out of marketing to put that into trade to support the new launches at Target.
Target was a big promo to get things started. Same thing at Food Lion. So actually at Publix also, we had, I think I told you guys, we just launched the two new paninis at Publix. We did programming there. So we definitely took some out of marketing and into trade. You guys see that. Hopefully you noticed. You know, SGA as a percentage, which traditionally is in the 20% range, was in the, I think 18.5% range. So, you know, you think between those two things, that would have put our gross margin, you know, I think north of 25%.
But those were intentional decisions. As a leadership team, we feel like we made the right decisions to support our new launches and to exceed our customers expectations. I will tell you that these new customers, way faster than I expected, are already reaching back out to Chris on what’s next already. And that’s a testament to the work Chris and his team is doing to be true partners. This is not a transactional business. Right? It is not about, hey, what’s the next item we’re getting in?
It’s how do we work collaboratively, how do we become the partner that is high quality. Right? High service Chris talks about all the time. It starts, we get in with grandma quality products and we stay and exceed with grandma quality service. And that’s what Chris has been able to show time and time again, that we’re now collaborating with new items with some of these customers. So I think it’s an incredibly great and strong roi.
George Kelly (Analyst at Roth Capital Partners)
Okay, okay, thank you.
That’s helpful. And then second question for me on Walmart, I know you haven’t been on shelves that long there, but can you talk to us just about the performance that you’ve seen so far and any kind of takeaways? Are you pleased with the velocities, et cetera? Just anything on Walmart. Thanks.
Adam L. Michaels (Chairman & Chief Executive Officer)
Yeah, very pleasantly surprised. And actually the word is I’m a little surprised. Of course, Chris said, you know, I told you so. But the products are doing very well. The ramp up, actually, I’m terribly impressed. Where again, the chicken items are north of 2,000 stores already. I told you, we just launched 30 days ago, 45 days ago, and we’re already north of 2,000 doors with the new chicken items. So I love the acv, meaning the number of doors we’re in.
I love every week the velocities are going up. So, yeah, I feel really good with it. Hopefully you just, you know, I just mentioned earlier the work that Lauren is doing to, you know, chum the waters, shall we say the roas at Walmart. I mean, guys, $30, I give a dollar, they give me $30 of retail sales back. That’s a pretty good ROI. So I love across the board, how Skip got the product together, how Chris is able to continue to drive those velocities, how Lauren is helping with the marketing.
It’s an incredible team effort, which is wonderful.
George Kelly (Analyst at Roth Capital Partners)
Okay, great. And then last one for me, just on the quarter, was there much impact from you raising pricing at all? And I guess subsequent to the quarter, has there been any kind of pricing?
And that’s all I had.
Thank you.
Adam L. Michaels (Chairman & Chief Executive Officer)
As you know, right. Because you’ve been with us from the very beginning, pricing is something we take every day. This is not a once a year type thing. We have the right pricing and as inflation unfortunately moves up for all of us, Chris does a great job partnering with our customers. I think so. I don’t think anything. I know obviously 90% of our sales growth was volume driven, which is amazing, and about 10% of it was pricing driven. So the right amount of pricing.
Of course, I’ll always challenge Chris to make sure that most, if not all of our customers are bigger than we are. So we shouldn’t be taking it on the chin. But what’s great is our pricing is at the right place, that it’s only a conversation of inflation. And I’ve shared with you guys before the research and the data that we subscribe to that gives us real time commodity inflation. And we’re able to share that in partnership with our customers. Customers every time.
George Kelly (Analyst at Roth Capital Partners)
Thank you. Thanks, George.
OPERATOR
Our next question is from Ryan Myers with Lake Street Capital.
Ryan Myers (Analyst at Lake Street Capital)
Hey, guys, thanks for taking my questions. First one for me. And you know, it might seem like
this is a given just given all the momentum you’re seeing across the business with the new retailers and the new products, but you know, Adam, do you still feel comfortable with the double digit organic growth for the Year.
Adam L. Michaels (Chairman & Chief Executive Officer)
Yeah, no, absolutely. Again, Chris and his team continue to not just deliver over deliver for us. You know, it’s wonderful. And you and I have spoken about it and I’ve spoken about it with our fellow investors. Yeah, it is pretty awesome. You know, we’re sort of everywhere, but equally we’re nowhere. Right. Chris is still staying true to his plus two items and e in each of our top 10 customers. He’s done a great job already, actually. I tell him he’s not pacing himself well because he’s ahead of plan.
Between the seven new items at Walmart, the five new items at Food lion, two new items at Fresh Market, two new items at Albertsons, I could go on the new item at Target with the additional second item coming in next month or in August. So yeah, no, I feel good with our growth, continued growth and. Yeah, no, absolutely. Got it. Nope, that’s good to hear.
Ryan Myers (Analyst at Lake Street Capital)
And then just kind of circling back on your comments on the, you know, marketing dollars that were in G and A coming out, shifting into trade promotion. You know, how should we think about that mix going forward? Was the numbers you posted in Q1 just a one time thing? Because as you mentioned, it’s below 20% of sales. So just kind of want to get a feel for that for the rest of this year.
Adam L. Michaels (Chairman & Chief Executive Officer)
No, I think I would, I think, I hope, I hope our fellow investors see, you know, I tell you guys, Anthony and I have our hands on the wheel at all times. We knew that we were investing in these new item launches and this new innovation and we knew that margin would be somewhat impacted by that. And that’s why again, our leadership team does everything together as a team. Therefore, we knew that we wanted to pull back other places to reinvest.
But, you know, I think we’d say, you know, I’d like to stay true to that 20%. We continue to be investing in new technologies, new teammates, you know, we’re doing. I’ll actually mention, unfortunately I’m not able to be at IDDBA today. So if you guys remember, iddba, the International Dairy, Deli and Bakery association, this is our super bowl. And obviously I want to hang with you guys more than my fellow teammates, so I’m pretty upset.
But Chris and Lauren are out there with our teams doing an amazing job again. They’re meeting with all the top customers, highlighting a bunch of new items. You guys saw, I think last week Lauren sent out a press release on all the new items that we’re launching. And I feel really bullish on what we’re doing. But Anthony and I, our hands are on the wheel. When we know we’re doing well, we’ll lean into trade and marketing.
If we know that we’re investing elsewhere, we’ll be able to pull it back. And that’s what you saw in Q1. But I wouldn’t say. I’d say I’d go back to our steady state for Q2 and onwards. Okay, got it.
Ryan Myers (Analyst at Lake Street Capital)
No, that’s helpful commentary. Thank you.
OPERATOR
Our next question is from Anthony Vendetti with the Maxim. Thanks. Just to follow on to the Bayshore facility, Adam, you mentioned that with the extra capacity been able to supply Walmart and Food Lions, how much capacity is left after supplying Walmart and Food lion in the Bay Shore facility?
Anthony Vendetti
if and when that capacity gets filled and maybe the timeline for when you’re expecting that to happen, does that necessitate either another facility or an acquisition, you know, in the near term?
Adam L. Michaels (Chairman & Chief Executive Officer)
So what’s really wonderful, and this is why the Crown acquisition was so amazing. It was a huge unlock for us from a capacity standpoint. You know, I would still say, you know, as strong as Chris works hard to try to stress us out, we should be able to double our business. What we’ve said is we could double our revenue. If we’re at roughly 200 million today, we could be 400 million with this new space.
The other thing, as a reminder, I think I just mentioned earlier, we just opened up, we just almost doubled our space in the East Rutherford facility also. So we had a lot of foresight into what we were doing in East Rutherford with the Bayshore acquisition that I think we’re good for the next couple of years now. That said, it doesn’t slow me down one bit on what’s the next acquisition. I still believe that it will include.
I’m looking for companies with their own manufacturing and distribution. That means that I will get additional capacity. But the great news, unlike a year ago before the Crown deal, we feel really good. There’s definitely a lot more opportunity for us capacity wise.
Anthony Vendetti
Okay. And then just one quick follow up. Any insight on the new packaging technologies and protein form factors that you have planned?
Adam L. Michaels (Chairman & Chief Executive Officer)
I think that we’ll continue to try to be true partners with our customers. You know, the biggest things that we continue to hear is one, I just don’t have the labor anymore. And we’re listening to that and you see the examples of like Publix, that we transitioned our bulk and kit items into our meals for one item, that was an investment on our part. You know, I don’t know, let’s call it a year ago. Less that added this new mapping technology, which stands for modified atmospheric pressure.
What it does is it pushes nitrogen in, pushes oxygen out and almost doubled our shelf life on our products. So labor is important, shelf life is a second one. So I spoke about the mapping just now. The HPP technology that we’re using and Walmart is another example that extends shelf life naturally. So these are the conversations that Chris and team have with our customers and that’s what we try to be responsive to. So I hope to continue that again so we could continue to be great partners.
Anthony Vendetti
Okay, thanks very much. Appreciate all the color. Thanks Anthony.
OPERATOR
Thank you. There are no further questions at this time. I’d like to hand the floor back over to Adam Michaels for any closing remarks.
Adam L. Michaels (Chairman & Chief Executive Officer)
Thank you operator. And thank you again to each of you for joining us today. To close the first quarter of fiscal 27 was in my view the clearest evidence yet that the platform we have spent the last three and a half years building is working exactly as designed. The flawless transition of our now enterprise wide ERP system to ensure that what gets measured gets improved. Lapping a $10 million digital Costco MVM effortlessly and still delivering revenue growth, adjusting out acquisitions, launching more than a dozen new items with major retailers, expanding adjusted EBITDA 71% and ending the quarter with $24.4 million in cash all in a single 90
day window is not a coincidence. It is the output of the 4C’s operating system at work. The macro tailwind in deli prepared continues to outpace total food and beverage. Our three facility network is humming. Our balance sheet is positioned for accretive M and A and our team is executing with real conviction. The course we have charted towards national Delhi leadership is set and our commitment to that destination is unwavering. As always, we appreciate our shareholders continued support and look forward to updating you on our progress in the quarters ahead.
Thank you.
Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company’s SEC filings and official press releases. Corporate participants’ and analysts’ statements reflect their views as of the date of this call and are subject to change without notice.
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