StockNews.AI

Rocky Mountain Chocolate Factory Reports Third Quarter Fiscal 2026 Financial Results

StockNews.AI • 5 hours

RMCF
High Materiality8/10

Information

Improved Operating Performance Drives Meaningful Gains in Gross Margin and Profitability        Exec...

Original source

AI Summary

Rocky Mountain Chocolate Factory reported a lower revenue of $7.5 million with a reduced net loss of $0.2 million in Q3 FY2026. Notably, the company plans to open 34 new franchise locations, supported by a recent capital raise to strengthen its balance sheet, which could position the firm for sustainable growth.

Sentiment Rationale

The announcement of new franchise agreements combined with improved margins signals recovery potential, similar to historical rebounds post-expansion announcements in other retail franchises.

Trading Thesis

RMCF is positioned for growth with a new franchise strategy and improving margins; consider buying for long-term upside.

Market-Moving

  • Franchise expansion with 34 new stores could drive significant revenue growth.
  • Improved gross margins signal potential for profitability recovery.
  • Recent equity raise strengthens balance sheet, allowing for strategic investments.
  • Margin-first strategy indicates possible long-term revenue stability despite short-term dips.

Key Facts

  • RMCF reported a net loss of $0.2 million in Q3 FY2026.
  • Total revenue declined to $7.5 million, down from $7.9 million last year.
  • Gross profit increased to $1.4 million due to improved pricing strategies.
  • 34 new franchise locations are planned to drive future growth.
  • A $2.7 million equity raise improved RMCF's financial flexibility.

Companies Mentioned

  • Franchisees: Franchisees are expected to accelerate expansion, impacting future revenue.

Corporate Developments

The developments highlight a significant shift in RMCF's franchise strategy, promoting growth while enhancing profitability through operational improvements. This approach fits into 'Corporate Developments' as it reflects strategic initiatives aimed at long-term sustainability.

Rocky Mountain Chocolate Factory Reports Strong Third Quarter Financial Results for Fiscal 2026

DURANGO, Colo., Jan. 13, 2026 (GLOBE NEWSWIRE) -- Rocky Mountain Chocolate Factory, Inc. (Nasdaq: RMCF) has announced its financial and operating results for the third quarter of fiscal 2026, which concluded on November 30, 2025. The company is experiencing improved operating performance, resulting in meaningful gains in gross margin and profitability.

Strategic Focus on Profitability

Jeff Geygan, Interim CEO of Rocky Mountain Chocolate Factory, emphasized the company's commitment to a margin-first transformation strategy. Geygan stated, “During the third quarter, we made deliberate decisions to exit lower-margin revenue streams and prioritize profitability. This focus led to significant improvements in gross profit and margin.”

The company is currently navigating through higher input costs and inefficiencies associated with production transitions, while also implementing initiatives involving pricing adjustments and SKU rationalization.

Franchise Development and Expansion

Rocky Mountain Chocolate Factory is also witnessing promising momentum in its franchise development pipeline. The company is in the process of constructing two new stores and has secured a milestone Area Development Agreement with four franchisees to introduce 34 new stores, reflecting increased interest from well-capitalized and multi-unit operators.

  • Two new stores currently under construction
  • 34 new stores to be developed under the latest Area Development Agreement
  • Increased alignment with the company's refreshed strategy

Financial Position Enhancement

In a continued effort to strengthen its financial position, Rocky Mountain Chocolate Factory completed a $2.7 million equity capital raise. Geygan pointed out that this initiative is designed to reduce leverage and enhance the balance sheet with additional working capital, providing greater flexibility for future investments in operations and strategic initiatives.

Key Financial Metrics for Q3 2026

Rocky Mountain Chocolate Factory reported notable financial metrics for the third quarter:

  • Total revenue: $7.5 million (down from $7.9 million year-over-year)
  • Gross profit: Increased to $1.4 million, up from $0.7 million in the previous year
  • Net loss: $0.2 million or $(0.02) per share, compared to a net loss of $0.8 million or $(0.11) per share in Q3 2025
  • EBITDA: Recorded at $0.4 million, up from a loss of $(0.4) million in the same quarter last year

While total revenue witnessed a decrease, this was largely attributed to the company’s strategic exit from lower-margin channels.

Upcoming Conference Call

Rocky Mountain Chocolate Factory will host a conference call to discuss its financial results. The details are as follows:

  • Date: Wednesday, January 14, 2026
  • Time: 9:00 a.m. Eastern Time
  • Dial-in registration link: [Link]
  • Live webcast registration link: [Link]

About Rocky Mountain Chocolate Factory

Established in 1981, Rocky Mountain Chocolate Factory, Inc. is a premier franchiser specializing in premium chocolate and confectionery retail. With over 250 locations across the U.S. and internationally, the company ranks among Entrepreneur’s Franchise 500® for 2025 and Franchise Times’ Franchise 400® for 2024. The stock of Rocky Mountain Chocolate Factory is traded on the Nasdaq under the symbol RMCF.

Related News