Rocky Mountain Chocolate Factory, Inc. reported a consolidated revenue of $27.5 million for the fiscal year ending February 28, 2026, a decrease of 7% from $29.6 million in the previous fiscal year. The company experienced a net loss of $4.6 million, an improvement from a loss of $6.1 million in fiscal 2025. The decline in revenue was primarily attributed to an 11% drop in sales of products to its network of franchised and licensed retail stores, which was partially offset by price increases. The company's gross margin improved significantly to 3.4% from 0.4% in the prior year, driven by enhanced production efficiencies and price adjustments to counter inflationary pressures.
In terms of operational changes, Rocky Mountain Chocolate Factory expanded its footprint by acquiring a third retail store in Camarillo, California, and signed four area development agreements that are expected to add 34 new franchise stores over the next three to five years. As of February 28, 2026, the company operated three company-owned stores, 111 licensee-owned stores, and 139 franchised stores across 34 states and the Philippines. The company also reported a total employee headcount of approximately 160, including 130 full-time employees.
The company faced challenges related to inflationary pressures, which increased costs for raw materials, labor, and freight. These factors contributed to a decrease in cash flows from operations, which amounted to a negative $1.8 million for the fiscal year. Additionally, Rocky Mountain Chocolate Factory was not in compliance with a financial covenant related to its credit agreements, but it received waivers from its lenders through August 31, 2026. The company is actively exploring additional funding sources to strengthen its liquidity position.
Looking ahead, Rocky Mountain Chocolate Factory aims to enhance its product offerings and improve customer engagement through various marketing strategies. The company plans to focus on increasing same-store sales and expanding its e-commerce presence. However, management has expressed concerns regarding the ongoing challenges posed by supply chain disruptions and labor shortages, which could impact future sales and operational efficiency. The company remains committed to implementing its business strategy to navigate these challenges and achieve sustainable growth.
About Rocky Mountain Chocolate Factory, Inc.
Rocky Mountain Chocolate Factory, Inc. is an international franchisor and retailer specializing in premium chocolates and confectionery products. The company operates and licenses stores across the U.S. and Philippines, emphasizing high-quality ingredients, in-store product preparation, and a fun store ambiance. Its business model includes franchise fees, royalties, and product sales, leveraging brand recognition and store experience to compete in the highly competitive confectionery market.
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