Rocky Mountain Chocolate Factory (RMCF)
NASDAQ:RMCF
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Rocky Mountain Chocolate Factory
(NASDAQ:RMCF)
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Rating:56Neutral
Price Target:
$2.00
▲(32.45% Upside)
Action:ReiteratedDate:02/13/26
The score is held back mainly by weak financial performance (ongoing losses, negative free cash flow, and rising leverage). Offsetting this, technical momentum is strong (price above major DMAs with positive MACD), and the latest earnings call showed meaningful margin/EBITDA improvement and strengthened liquidity, though revenue remains pressured and profitability is not yet sustained.
Positive Factors
Margin recovery and EBITDA turnaround
A material improvement in manufacturing margin to 21.4% and a move to positive EBITDA indicate the company’s cost and mix actions are working. Sustained margin expansion supports durable operating leverage, reduces break-even risk, and increases the likelihood of translating sales into lasting profitability if maintained.
Negative Factors
Ongoing losses and negative cash flow
The company remains loss-making on a TTM basis with materially negative free cash flow, reflecting persistent negative operating economics. Continued cash deficits constrain reinvestment, increase dependence on capital raises, and elevate risk that operating improvements must be sustained to avoid recurring dilution or higher leverage.
Read all positive and negative factors
Positive Factors
Negative Factors
Margin recovery and EBITDA turnaround
A material improvement in manufacturing margin to 21.4% and a move to positive EBITDA indicate the company’s cost and mix actions are working. Sustained margin expansion supports durable operating leverage, reduces break-even risk, and increases the likelihood of translating sales into lasting profitability if maintained.
Read all positive factors
Rocky Mountain Chocolate Factory (RMCF) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$20.91M
Dividend YieldN/A
Average Volume (3M)79.13K
Price to Earnings (P/E)―
Beta (1Y)0.49
Revenue Growth8.09%
EPS Growth17.25%
CountryUS
Employees135
SectorConsumer Defensive
Sector Strength42
IndustryFood Confectioners
Share Statistics
EPS (TTM)-0.02
Shares Outstanding9,332,822
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 Cap1.23
Enterprise Value/Revenue0.87
Enterprise Value/Gross Profit4.14
Enterprise Value/Ebitda-11.06
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 Description
Rocky 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 trea...
How the Company Makes Money
RMCF primarily makes money by monetizing its branded confectionery business through a combination of direct retail sales (where it operates company-owned locations) and franchising (where independent franchisees operate stores under the Rocky Moun...
Rocky Mountain Chocolate Factory Earnings Call Summary
Earnings Call Date:Jan 13, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:May 28, 2026
Earnings Call Sentiment Positive
The call emphasized a clear margin-first transformation showing measurable progress: gross profit doubled, gross manufacturing margin improved materially to 21.4%, EBITDA turned positive, expenses declined, and a $2.7M equity raise improved liquidity. Operational and digital investments (POS, unique store sites, DoorDash integration) and franchise momentum (34 area development agreements, 2 stores under construction) support a path to long-term growth. Near-term headwinds include an intentional revenue decline (~5.1%) from exiting low-margin channels, ongoing production transition inefficiencies, higher material/freight costs, and a multi-year timeline for meaningful store-driven top-line growth. Overall, the positives (margin recovery, cost reductions, EBITDA improvement, capitalization) substantially outweigh the near-term revenue and operational challenges.Positive Updates
Improved Gross Profit and Margin
Total product and retail gross profit increased to $1.4M in 2026Q3 from $0.7M a year earlier (+100%), driven by pricing actions, improved product mix, and labor efficiencies. Gross manufacturing margin improved to 21.4% (vs. 10% a year ago and -0.6% in the prior quarter), representing an increase of 11.4 percentage points year-over-year and ~22 percentage points vs. the previous quarter.
Negative Updates
Year-over-Year Revenue Decline
Total revenue declined to $7.5M from $7.9M year-over-year, a drop of approximately -5.1%. Management attributes the decline to an intentional exit from low- or negative-margin special and wholesale revenue streams as part of a margin-first strategy.
Read all updates
Q3-2026 Updates
Positive
Negative
Improved Gross Profit and Margin
Total product and retail gross profit increased to $1.4M in 2026Q3 from $0.7M a year earlier (+100%), driven by pricing actions, improved product mix, and labor efficiencies. Gross manufacturing margin improved to 21.4% (vs. 10% a year ago and -0.6% in the prior quarter), representing an increase of 11.4 percentage points year-over-year and ~22 percentage points vs. the previous quarter.
Read all positive updates
Company Guidance
The company guided a margin-first path to profitability, reporting Q3 FY2026 revenue of $7.5M (vs. $7.9M prior year) with total product and retail gross profit of $1.4M (vs. $700K), a gross manufacturing margin of 21.4% (vs. 10% prior year and -0.6% last quarter), total costs and expenses down to $7.5M (from $8.6M), net loss of $200K (‑$0.02/share) vs. a $800K loss (‑$0.11/share) prior year, and EBITDA of $400K vs. negative $400K; operational targets include over 250 franchised/licensed locations, two stores under construction and 34 stores under area development agreements (4–5 year buildouts with initial stores within the first year), a lease-to-open cadence of ~6 months (lease process 2–4 months), a $2,800/day benchmark for $1M AUV (company store noted daily sales >$4,000), average stores per franchisee up from 1.34 to 1.39, SKU rationalization eliminating hundreds of SKUs with an expected $500K–$1M of additional savings, 120 stores live on the new POS, unique websites for 100% of domestic locations and DoorDash storefronts live, remodels starting after March 1 with the majority by Oct 2026 and virtually all within 24 months, nearly 20% of annual chocolate consumption hedged at favorable prices after the removal of an ~10% cocoa tariff (cocoa futures ~ $5,100/ton), and a post-quarter $2.7M equity raise used to pay down $1.2M debt and retain $1.5M working capital — all intended to drive margin expansion, higher AUVs, and a return to positive cash flow over the coming quarters.Rocky Mountain Chocolate Factory Financial Statement Overview
Summary
Income Statement
18
Very Negative
Balance Sheet
34
Negative
Cash Flow
16
Very Negative
| Breakdown | TTM | May 2025 | Feb 2024 | Feb 2023 | Feb 2022 | May 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 29.64M | 29.58M | 27.95M | 30.43M | 29.49M | 21.76M |
| Gross Profit | 6.21M | 3.25M | 4.71M | 8.15M | 8.96M | 4.52M |
| EBITDA | -2.32M | -4.72M | -3.94M | -4.10M | 223.65K | -282.87K |
| Net Income | -4.04M | -6.12M | -4.17M | -5.68M | -341.70K | -899.78K |
Balance Sheet | ||||||
| Total Assets | 20.73M | 21.18M | 20.58M | 21.99M | 26.88M | 24.95M |
| Cash, Cash Equivalents and Short-Term Investments | 641.00K | 720.00K | 2.08M | 4.72M | 7.59M | 5.63M |
| Total Debt | 9.22M | 7.21M | 2.94M | 2.39M | 1.81M | 1.96M |
| Total Liabilities | 14.72M | 14.20M | 9.94M | 7.62M | 7.48M | 5.98M |
| Stockholders Equity | 6.01M | 6.97M | 10.64M | 14.37M | 19.40M | 18.97M |
Cash Flow | ||||||
| Free Cash Flow | -2.06M | -10.36M | -5.45M | -3.10M | 1.92M | -181.22K |
| Operating Cash Flow | -184.00K | -6.59M | -2.44M | -2.10M | 2.86M | 67.35K |
| Investing Cash Flow | -2.01M | -1.66M | -1.45M | -767.82K | -605.00K | -70.99K |
| Financing Cash Flow | 1.75M | 6.89M | 1.25M | 0.00 | -299.06K | 814.86K |
Rocky Mountain Chocolate Factory Technical Analysis
Neutral
1.51
Price Trends
2.43
Negative
2.09
Positive
1.86
Positive
Market Momentum
-0.06
Positive
45.24
Neutral
33.13
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RMCF, the sentiment is Neutral. The current price of 1.51 is below the 20-day moving average (MA) of 2.32, below the 50-day MA of 2.43, and below the 200-day MA of 1.86, indicating a neutral trend. The MACD of -0.06 indicates Positive momentum. The RSI at 45.24 is Neutral, neither overbought nor oversold. The STOCH value of 33.13 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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 | $2.98B | 26.69 | 11.02% | 0.95% | 0.34% | 0.85% | |
63 Neutral | $74.83B | 26.09 | 9.43% | 3.53% | 4.13% | -5.19% | |
62 Neutral | $20.33B | 14.63 | -3.31% | 3.23% | 1.93% | -12.26% | |
62 Neutral | $42.15B | 41.93 | 19.20% | 3.00% | 4.71% | -23.03% | |
56 Neutral | $20.91M | -21.39 | -56.79% | ― | 8.09% | 17.25% | |
54 Neutral | $594.09M | -1.38 | -66.05% | 3.34% | -10.40% | -1904.10% |
* Consumer Defensive Sector Average
RMCF
Rocky Mountain Chocolate Factory
2.24
1.09
94.78%
HSY
The Hershey Company
207.97
53.61
34.73%
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43.86
15.29
53.52%
MDLZ
Mondelez International
58.38
-3.61
-5.83%
DNUT
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3.45
-0.55
-13.69%
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.