Rocky Mountain Chocolate Factory Reports $6.8M Revenue and $662K Net Loss for Quarter Ended August 31, 2025

Rocky Mountain Chocolate Factory, Inc. reported a total revenue of $6.8 million for the three months ended August 31, 2025, reflecting a 6.9% increase from $6.4 million in the same period last year. The company's net loss for the quarter was $662,000, a slight improvement from a loss of $722,000 in the prior year. For the six months ending August 31, 2025, total revenue reached $13.2 million, up 3.2% from $12.8 million in the previous year, while the net loss narrowed to $986,000 from $2.4 million.

The increase in revenue was primarily driven by a rise in royalty and marketing fees, which grew by 12.9% to $1.6 million, attributed to higher store sales. However, sales from Durango products and retail decreased by 2.9% to $9.9 million, largely due to the non-renewal of an unprofitable contract. The company also experienced a decrease in franchise fees, which fell by 37% to $68,000, reflecting fewer store openings.

Operationally, Rocky Mountain Chocolate Factory made strategic moves, including the acquisition of a franchise location in Camarillo, California, for approximately $200,000. The company also reported a total of 256 stores operating under its brand as of August 31, 2025, a decrease from 260 stores at the end of the previous fiscal period. The company’s employee headcount remained stable, with no significant changes reported.

The company faced increased costs, with total cost of sales rising by 19.9% to $5.2 million, driven by higher raw material and labor costs. General and administrative expenses decreased significantly by 39.8% to $976,000, reflecting cost-cutting measures. Despite these efforts, the gross margin percentage fell to -0.6% from 11.5% in the prior year, indicating challenges in managing costs effectively.

Looking ahead, Rocky Mountain Chocolate Factory anticipates continued challenges due to inflationary pressures affecting raw materials and labor. The company plans to focus on improving manufacturing efficiencies and increasing e-commerce sales while navigating the seasonal nature of its business. Management expressed caution regarding the company's ability to continue as a going concern, emphasizing the need for ongoing liquidity management and compliance with debt covenants.