Rocky Mountain Chocolate Factory, Inc. reported a revenue increase of 5.8% for the fiscal year ending February 28, 2025, reaching $29.6 million compared to $28.0 million in the previous year. The company's operating loss widened to $5.9 million from $4.9 million in fiscal 2024, with a net loss of $6.1 million, reflecting a loss per share of $0.86, up from $0.77 in the prior year. The increase in revenue was primarily driven by a 9.1% rise in sales of products to franchisees and other customers, which amounted to $24.0 million, alongside a slight increase in franchise fees.
The company underwent significant strategic changes, including the divestiture of its frozen yogurt business, U-Swirl, which was completed in May 2023 for $2.75 million. This move was aimed at refocusing on its core confectionery operations. Additionally, Rocky Mountain Chocolate Factory entered into a new credit agreement in September 2024, securing $6.0 million to enhance liquidity and support ongoing operations. However, the company faced challenges with rising costs, particularly in raw materials and labor, which contributed to a decrease in gross margin to 0.4% from 6.2% in the previous year.
Operationally, the company reported a total of 260 stores as of February 28, 2025, including 2 company-owned, 138 domestic franchise stores, and 3 international locations. The company has also been exploring opportunities for geographic expansion, particularly in high-traffic areas. Despite these efforts, the company experienced a decline in same-store sales, which could impact future revenue growth. The total employee headcount stood at approximately 160, with most employees working on an hourly basis.
Looking ahead, Rocky Mountain Chocolate Factory aims to improve profitability by enhancing product offerings and operational efficiencies. The company plans to leverage its strong brand recognition and expand its e-commerce presence to drive sales. However, management has expressed concerns regarding the ability to continue as a going concern due to ongoing losses and cash flow challenges, emphasizing the need for effective execution of its business strategy to stabilize financial performance.
About Rocky Mountain Chocolate Factory, Inc.
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