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Rocky Mountain Chocolate Factory (RMCF)
NASDAQ:RMCF
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Rocky Mountain Chocolate Factory
(NASDAQ:RMCF)
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Rating:41Neutral
Price Target:
$1.50
▼(-10.18% Downside)
Rocky Mountain Chocolate Factory's stock score is primarily impacted by its poor financial performance, characterized by declining profitability and increased financial risk. Technical indicators suggest bearish momentum, and valuation metrics are unattractive due to negative earnings. While the earnings call revealed some positive strategic initiatives, the overall financial challenges weigh heavily on the stock's outlook.
Positive Factors
Operational Efficiency
Improved operational efficiencies indicate a more streamlined cost structure, which can enhance profitability and competitiveness over time.
Franchise Growth
Growth in franchise and royalty fees suggests successful expansion and increased franchisee engagement, strengthening long-term revenue streams.
Technology Integration
Implementing a new POS system enhances operational insights and decision-making, supporting better management and strategic planning.
Negative Factors
Revenue Stagnation
Flat revenue growth indicates challenges in expanding market share and sales, which can hinder long-term financial performance.
Ongoing Net Loss
Continued net losses reflect underlying profitability issues, which may impact the company's ability to invest in growth and innovation.
Increased Financial Leverage
Higher financial leverage increases risk, potentially limiting financial flexibility and increasing vulnerability to economic downturns.
Rocky Mountain Chocolate Factory (RMCF) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$13.18M
Dividend YieldN/A
Average Volume (3M)79.13K
Price to Earnings (P/E)―
Beta (1Y)0.50
Revenue Growth8.09%
EPS Growth17.25%
CountryUS
Employees135
SectorConsumer Defensive
Sector Strength42
IndustryFood Confectioners
Share Statistics
EPS (TTM)-0.09
Shares Outstanding7,800,508
10 Day Avg. Volume50,417
30 Day Avg. Volume79,134
Financial Highlights & Ratios
PEG Ratio-0.06
Price to Book (P/B)1.61
Price to Sales (P/S)0.38
P/FCF Ratio-1.09
Enterprise Value/Market Cap1.42
Enterprise Value/Revenue0.62
Enterprise Value/Gross Profit3.83
Enterprise Value/Ebitda-6.64
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Rocky Mountain Chocolate Factory Business Overview & Revenue Model
Company DescriptionRocky Mountain Chocolate Factory (RMCF) is a premier manufacturer and retailer of gourmet chocolates and confections, founded in 1981 in Durango, Colorado. The company specializes in handcrafted chocolates, fudge, and a variety of other sweet treats, catering to both individual consumers and wholesale clients. RMCF operates a network of franchise stores, retail locations, and e-commerce platforms, positioning itself in the specialty chocolate and confectionery sector.
How the Company Makes MoneyRocky Mountain Chocolate Factory generates revenue through multiple channels, primarily from retail sales in its franchised and corporate-owned stores, where customers purchase a wide range of chocolate products. The company also earns significant income from wholesale distribution, supplying chocolate and confections to various retailers and food service companies. E-commerce sales through its online store add another revenue stream, allowing direct access to consumers nationwide. Additionally, RMCF benefits from strategic partnerships with other businesses, including co-branding opportunities and seasonal promotions, which enhance brand visibility and sales. Overall, their diversified revenue model, encompassing retail, wholesale, and online sales, contributes to the company's financial performance.
Rocky Mountain Chocolate Factory Earnings Call Summary
Earnings Call Date:Oct 13, 2025
(Q2-2026)
| % Change Since: |
Next Earnings Date:Jan 20, 2026
Earnings Call Sentiment Neutral
The call highlighted significant efforts in brand modernization, franchise expansion, and operational improvements, contributing to revenue growth. However, financial challenges such as a negative gross profit, net loss, and increased borrowing point to ongoing difficulties. The sentiment is balanced with both promising developments and notable challenges.Q2-2026 Updates
Positive Updates
Revenue Growth
Total revenue for the quarter was $6.8 million, up from $6.4 million in the same period last year, with product sales increasing to $5.2 million from $4.9 million.
Franchise Development and Expansion
New store openings and franchise agreements signed in strategic locations such as Charleston, South Carolina, and Jersey Shore Premium Outlets, with a strong development pipeline and remodels showing immediate sales pickup.
Brand Modernization
Significant progress in rebranding efforts including a new logo, store design, packaging, and website, aiming for a cohesive customer experience and aligning stores with the new brand identity within 24 months.
Digital and Operational Improvements
Deployment of new technology and automation in production, refreshed website launch, and partnerships with third-party delivery services like DoorDash to enhance customer engagement and sales.
Negative Updates
Negative Gross Profit
Total product and retail gross profit was negative $33,000 compared to $0.6 million in the previous year, due to inventory adjustments and other comparability factors.
Net Loss
The company reported a net loss of $0.7 million or a negative $0.09 per share, compared to a net loss of $0.7 million or a negative $0.11 per share in the previous year.
Increased Borrowing
The company added $1.8 million in new borrowings to support working capital and seasonal needs, increasing total debt outstanding to $7.8 million.
Cash Burn Concerns
Despite assurances that cash burn will not continue, the company is currently experiencing cash burn, with potential concerns about future equity financing.
Company Guidance
During the conference call discussing Rocky Mountain Chocolate Factory's financial results for the fiscal second quarter of 2026, the company provided guidance emphasizing strategic initiatives and operational improvements. Key metrics included total revenue of $6.8 million, a 6.25% increase from the previous year, with product sales rising to $5.2 million and franchise and royalty fees increasing to $1.6 million. Despite a net loss of $0.7 million, the company highlighted the potential for future profitability driven by franchise growth, operational efficiency, and brand development. Notable efforts included the onboarding of a new VP of Operations to reduce costs, improvement of in-stock items, and the expansion of production capabilities to meet seasonal demand. The company's cash position improved to $2 million, supported by new borrowings, while total debt stood at $7.8 million. With a focus on increasing franchisee engagement, refreshing the brand identity, and leveraging digital and delivery platforms, Rocky Mountain Chocolate Factory aims to enhance shareholder value and achieve long-term growth and profitability.Rocky Mountain Chocolate Factory Financial Statement Overview
Summary
Rocky Mountain Chocolate Factory is facing significant financial challenges, including declining revenue, negative profitability margins, increased leverage, and negative cash flows. These issues highlight operational inefficiencies and market pressures, posing substantial financial risks.Income Statement
Rocky Mountain Chocolate Factory has experienced declining revenue with a negative trend in profitability margins. The gross profit margin has decreased from 36.9% in 2020 to 11% in 2025, indicating cost pressures or inefficiencies. The net profit margin has been negative over recent years, with a downward trajectory from 3.2% in 2020 to -20.7% in 2025. Revenue growth has been unstable, with significant declines, especially evident from 2024 to 2025. This trend reflects challenges in maintaining a stable revenue stream and profitability.45
Neutral
Balance Sheet
The company's financial leverage has increased, with the debt-to-equity ratio rising from 0.14 in 2020 to 1.03 in 2025, indicating higher financial risk. The equity ratio has declined, reflecting a reduced buffer to absorb potential losses. Additionally, return on equity has been consistently negative due to ongoing net losses, showcasing poor returns for shareholders. The balance sheet indicates a weakened financial position and reduced investor confidence.30
Negative
Cash Flow
Operating cash flow has turned negative, with significant declines from 2020 to 2025, reflecting operational challenges. Free cash flow has also deteriorated, indicating insufficient cash generation to cover capital expenditures. The operating cash flow to net income ratio is negative, further highlighting inefficiencies in converting income into cash. The cash flow situation poses liquidity risks and limits the company's financial flexibility.40
Negative
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 29.99M | 29.58M | 27.95M | 30.43M | 29.49M | 21.76M |
| Gross Profit | 4.88M | 3.25M | 4.71M | 8.15M | 8.96M | 4.52M |
| EBITDA | -2.82M | -4.72M | -3.94M | -4.10M | 223.65K | -282.87K |
| Net Income | -4.73M | -6.12M | -4.17M | -5.68M | -341.70K | -899.78K |
Balance Sheet | ||||||
| Total Assets | 22.25M | 21.18M | 20.58M | 21.99M | 26.88M | 24.95M |
| Cash, Cash Equivalents and Short-Term Investments | 2.02M | 720.00K | 2.08M | 4.72M | 7.59M | 5.63M |
| Total Debt | 9.44M | 7.21M | 2.94M | 2.39M | 1.81M | 1.96M |
| Total Liabilities | 16.13M | 14.20M | 9.94M | 7.62M | 7.48M | 5.98M |
| Stockholders Equity | 6.13M | 6.97M | 10.64M | 14.37M | 19.40M | 18.97M |
Cash Flow | ||||||
| Free Cash Flow | -3.52M | -10.36M | -5.45M | -3.10M | 1.92M | -181.22K |
| Operating Cash Flow | -1.06M | -6.59M | -2.44M | -2.10M | 2.86M | 67.35K |
| Investing Cash Flow | -2.19M | -1.66M | -1.45M | -767.82K | -605.00K | -70.99K |
| Financing Cash Flow | 4.30M | 6.89M | 1.25M | 0.00 | -299.06K | 814.86K |
Rocky Mountain Chocolate Factory Technical Analysis
Negative
1.67
Price Trends
1.65
Negative
1.63
Negative
1.49
Positive
Market Momentum
>-0.01
Negative
48.36
Neutral
33.29
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RMCF, the sentiment is Negative. The current price of 1.67 is above the 20-day moving average (MA) of 1.62, above the 50-day MA of 1.65, and above the 200-day MA of 1.49, indicating a neutral trend. The MACD of >-0.01 indicates Negative momentum. The RSI at 48.36 is Neutral, neither overbought nor oversold. The STOCH value of 33.29 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for RMCF.
Rocky Mountain Chocolate Factory Risk Analysis
Rocky Mountain Chocolate Factory disclosed 32 risk factors in its most recent earnings report. Rocky Mountain Chocolate Factory reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Rocky Mountain Chocolate Factory Peers Comparison
UnderperformOutperform
Sector (62)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $36.97B | 27.27 | 31.01% | 3.07% | 4.71% | -23.03% | |
70 Outperform | $28.93B | 22.77 | 32.52% | 2.76% | -1.01% | 25.47% | |
66 Neutral | $2.66B | 29.26 | 10.48% | 0.96% | 0.34% | 0.85% | |
62 Neutral | $20.33B | 14.63 | -3.31% | 3.23% | 1.93% | -12.26% | |
62 Neutral | $70.85B | 20.51 | 13.07% | 3.53% | 4.13% | -5.19% | |
53 Neutral | $743.44M | ― | -55.07% | 3.17% | -10.40% | -1904.10% | |
41 Neutral | $13.18M | ― | -56.79% | ― | 8.09% | 17.25% |
* Consumer Defensive Sector Average
RMCF
Rocky Mountain Chocolate Factory
1.67
-1.25
-42.81%
HSY
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178.78
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-2.11%
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MDLZ
Mondelez International
54.11
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DNUT
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4.42
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-55.76%
Rocky Mountain Chocolate Factory Corporate Events
Executive/Board ChangesRegulatory Filings and Compliance
Rocky Mountain Chocolate Factory Faces Nasdaq Compliance Issue
Neutral
Sep 19, 2025
On September 15, 2025, Allen C. Harper resigned from the board of Rocky Mountain Chocolate Factory, Inc. due to other professional responsibilities, not due to any disagreement with the company. Subsequently, the company received a notice from Nasdaq indicating non-compliance with certain corporate governance requirements due to the resignation, specifically regarding the composition of independent directors on the board and audit committee. The company plans to address this issue by appointing an additional independent director before the cure period ends in September 2026. This non-compliance does not currently affect the company’s stock listing or trading on Nasdaq.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.