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Rocky Mountain Chocolate Factory, Inc. RMCF delivered a loss per share of 11 cents in the second quarter of fiscal 2025, narrower than the year-ago quarter’s loss of 16 cents per share.
RMCF’s Revenues in Detail
Rocky Mountain registered revenues of $6.4 million in the fiscal second quarter, down 2.7% year over year.
Lower revenues from all three sources dampened the topline.
Following the earnings release on Oct. 15, shares of this company gained nearly 1.4% till last trading.
Rocky Mountain’s Segment Details
Rocky Mountain derives revenues from three sources — Durango product and retail sales, Franchise fees and Royalty and marketing fees.
For the quarter under review, Durango product and retail sales reported revenues of $4.9 million, down 1.9% from the year-ago quarter. This primarily resulted from decreased year-over-year franchisee demand for products purchased from the Durango production facility, in part impacted by a June 1, 2024 price increase to the franchise network, and in part as a result of lower total store count.
Revenues from the Franchise fees totaled $0.04 million, down 7.3% year over year.
Royalty and marketing fees generated revenues of $1.4 million, down 5.1% from the year-ago quarter. This was primarily due to a decrease in stores year over year that are subject to royalty fees.
Rocky Mountain Chocolate Factory, Inc. Price, Consensus and EPS Surprise
Rocky Mountain Chocolate Factory, Inc. price-consensus-eps-surprise-chart | Rocky Mountain Chocolate Factory, Inc. Quote
RMCF’s Gross Margin
In the quarter under review, Rocky Mountain’s gross margin increased to 11.5% from 7.7% in the year-ago quarter. This primarily resulted from an increase in selling prices and operational efficiencies.
Rocky Mountain’s Operating Expenses Analysis
Sales and marketing expenses decreased 68.8% year over year to $0.1 million, partly due to operational efficiencies and cost-cutting measures and partly due to the timing of anticipated expenses. General and administrative expenses decreased 3.9% year over year to $1.6 million primarily due to a decrease in legal and third-party fees.
Franchise costs increased 55% year over year to $0.9 million, primarily due to investments made in the company’s franchise development team designed to increase franchised store locations as it continues to build its franchise network and identify new sites and franchisees. Retail operating expenses increased 19.8% year over year to $0.2 million, primarily resulting from the addition of the Corpus Christi location and the acceleration of expenses on a year-over-year basis.