In This Article:
-
Total Revenue: $6.4 million, down from $6.6 million year-over-year.
-
Product Sales: $4.9 million, compared to $5 million last year.
-
Franchise and Royalty Fees: Flat at $1.5 million.
-
Gross Profit: $0.6 million, up from $0.4 million.
-
Gross Margin: Improved to 11.5% from 7.7%.
-
Total Costs and Expenses: Reduced to $7.3 million from $7.6 million.
-
Net Loss: $0.7 million or $0.11 per share, compared to a loss of $1 million or $0.16 per share.
-
Cash Balance: $1 million, down from $2 million at February 29, 2024.
-
Total Inventories: $6.1 million, up from $4.4 million at February 29, 2024.
-
Line of Credit Outstanding: $3.5 million, compared to $1.3 million at February 29, 2024.
-
Long Term Debt: None.
Release Date: October 15, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
-
Rocky Mountain Chocolate Factory Inc (NASDAQ:RMCF) is executing a multiyear strategic plan focused on strengthening liquidity, rebuilding the executive team, and laying a foundation for sustainable growth.
-
The company is expanding its footprint with new store openings, including a new location in Edmond, Oklahoma, and is finalizing agreements for three additional locations.
-
RMCF has been recognized in the Franchise 400 for 2024, highlighting its leadership in the premium chocolate category and attractiveness to franchisees.
-
The company is nearing completion of a rebranding process, which includes a new store design aimed at enhancing customer engagement and franchisee interest.
-
RMCF has implemented a new $6 million credit facility, providing additional capital for strategic growth initiatives and retiring a previous $4 million credit facility.
Negative Points
-
Total revenue for the fiscal second quarter decreased to $6.4 million from $6.6 million in the same period last year.
-
Net loss for the quarter was $0.7 million, or $0.11 per share, compared to a loss of $1 million, or $0.16 per share, in the previous year.
-
The company ended the fiscal second quarter with a reduced cash balance of $1 million, down from $2 million at the end of February 2024.
-
RMCF's inventory levels increased to $6.1 million from $4.4 million, reflecting a strategic buildup but also tying up capital.
-
The impact of new store openings on revenue growth for fiscal 2025 is expected to be limited due to the time required to establish new locations.
Q & A Highlights
Q: Have you seen any measurable improvements in operational efficiencies since increasing employee wages at the factory level? A: It's a bit early to tell, but retention levels have significantly improved. This is encouraging as having well-trained employees who report to work on time is crucial for achieving production goals. - Jeffrey Geygan, Interim CEO