US meatballs maker MamaMancini’s has reported a 12% fall in third-quarter sales – but insisted the result was the consequence of a deliberate move to stop selling some low-margin lines.
Net sales for the three months to the end of October hit US$3.2m, compared to $3.8m a year earlier. Despite a fall in the cost of sales, gross profit still fell but the company reported an increase in its gross profit margin from 28% to 30%.
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The group posted a loss from operations of $358,159, lower than the $748,383 generated in the third quarter of 2014/2015. MamaMancini’s made a net loss of $975,522, up from $773,809 a year earlier due in part to the write-off of debt restructuring costs.
CEO Carl Wolf saw positives from the company’s performance. “Our continued focus on lowering operating expenses, pruning underperforming accounts from our portfolio and expanding our distribution footprint of high-quality retailers is resulting in positive outcomes for our business. During the third quarter, we delivered a higher gross margin and substantially decreased our operating and net losses. By adjusting our pricing, eliminating unprofitable accounts and prudently spending on sales and marketing, our new sales have improved margin profiles and are setting us on a path to achieve break-even from an operating cash flow perspective in the fall of 2015.”
He added: “Just last month we received new authorizations for distribution representing over 2,200 new product placements, in additional locations within the Safeway, Albertsons, Randalls, Associated Grocers, Whole Foods and Lowe’s Supermarkets retail chains at locations across the United States.”
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