Rocky Mountain Chocolate Factory (NASDAQ:RMCF – Get Free Report) announced its quarterly earnings results on Monday. The company reported ($0.14) earnings per share for the quarter, Zacks reports. Rocky Mountain Chocolate Factory had a negative return on equity of 117.49% and a negative net margin of 22.25%. The business had revenue of $6.65 million during the quarter.
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 Stock Performance
Shares of Rocky Mountain Chocolate Factory stock opened at $0.92 on Wednesday. Rocky Mountain Chocolate Factory has a 52 week low of $0.66 and a 52 week high of $2.99. The company has a market capitalization of $8.68 million, a PE ratio of -1.39 and a beta of 0.76. The stock’s fifty day moving average is $1.01 and its two-hundred day moving average is $1.43. The company has a quick ratio of 0.65, a current ratio of 1.13 and a debt-to-equity ratio of 1.59.
Wall Street Analyst Weigh In
Separately, Weiss Ratings cut shares of Rocky Mountain Chocolate Factory from a “sell (d-)” rating to a “sell (e+)” rating in a research note on Wednesday, August 26th. One equities research analyst has rated the stock with a Sell rating. According to MarketBeat.com, the company presently has an average rating of “Sell”.
Check Out Our Latest Analysis on Rocky Mountain Chocolate Factory
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.
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