Rocky Mountain Chocolate Factory (NASDAQ:RMCF) Posts Earnings Results

Rocky Mountain Chocolate Factory (NASDAQ:RMCF) released its quarterly earnings data on Monday. The company reported ($0.14) earnings per share (EPS) for the quarter, Zacks reports. The company had revenue of $6.65 million for the quarter. Rocky Mountain Chocolate Factory had a negative return on equity of 100.52% and a negative net margin of 19.84%.

Here are the key takeaways from Rocky Mountain Chocolate Factory’s conference call:

• Gross margin improved significantly: Product and retail gross profit rose to $2.4 million from roughly breakeven a year ago, lifting gross margin to 8% from negative 0.6%, supported by better production execution, pricing, and the larger company-owned store base.
• Profitability remained under pressure: Second-quarter revenue was essentially flat at $6.7 million, while the net loss widened to $1.3 million, or $0.14 per share, from $0.7 million, or $0.09 per share, as operating expenses increased.
• Liquidity and franchise trends are concerns: Cash declined to $0.4 million, royalty and marketing fees fell because of fewer franchise stores, and the company continues to address its debt and working-capital needs.
• Financial strategic review is ongoing: The company completed a $6.6 million Durango sale-leaseback to repay 12% debt and secured a new $2 million loan, while evaluating financing, a sale, merger, business combination, or going-private transaction.
• Management is targeting operational improvement through the holiday season: Initiatives focus on product availability, supply-chain efficiency, store productivity, omnichannel sales, and franchisee support, with August described as the highest production and shipping month of the year.

Rocky Mountain Chocolate Factory Price Performance

Shares of RMCF opened at $0.93 on Tuesday. The business’s fifty day moving average is $1.00 and its 200 day moving average is $1.43. Rocky Mountain Chocolate Factory has a 12-month low of $0.66 and a 12-month high of $2.99. The company has a quick ratio of 0.65, a current ratio of 1.13 and a debt-to-equity ratio of 1.59. The stock has a market cap of $8.81 million, a P/E ratio of -1.53 and a beta of 0.76.

Wall Street Analyst Weigh In

Separately, Weiss Ratings lowered Rocky Mountain Chocolate Factory from a “sell (d-)” rating to a “sell (e+)” rating in a research report on Wednesday, August 26th. One equities research analyst has rated the stock with a Sell rating. According to data from MarketBeat.com, Rocky Mountain Chocolate Factory currently has a consensus rating of “Sell”.

Rocky Mountain Chocolate Factory Company Profile

Rocky Mountain Chocolate Factory, Inc is a confectionery company that manufactures and sells a variety of premium chocolate and other sweet products. Its offerings include chocolate-covered treats, caramel apples, fudge, truffles, clusters, brittles and other seasonal or specialty confections.

The company sells its products through a network of franchised and company-affiliated retail stores, as well as through wholesale and online channels. Its stores typically combine on-site candy production with retail sales, allowing customers to purchase freshly prepared products and packaged gifts.

Founded in 1981 and headquartered in Durango, Colorado, Rocky Mountain Chocolate Factory has expanded its brand beyond its original Colorado operations through franchising and distribution.