Improved Operating Performance Drives Meaningful Gains in Gross Margin and Profitability
Executed Milestone Franchise Area Development Agreement to Bring 34 New Stores to Market
Management to Host Conference Call Wednesday at 9:00 a.m. Eastern Time
DURANGO, Colo., Jan. 13, 2026 (GLOBE NEWSWIRE) -- Rocky Mountain Chocolate Factory, Inc. (Nasdaq: RMCF) (the "Company", "we", "RMCF", or "Rocky Mountain Chocolate Factory"), America's Chocolatier$(TM)$ and a leading franchiser of a premium chocolate and confectionary retail store concept, is reporting financial and operating results for its third quarter of fiscal 2026, which ended November 30, 2025.
"During the third quarter, we continued to execute our margin-first transformation, making deliberate decisions to exit lower-margin revenue streams and prioritize profitability," said Jeff Geygan, Interim CEO of Rocky Mountain Chocolate Factory. "This led to meaningful improvement in gross profit and margin, which remains our primary focus as we reposition the business for sustainable growth. Ongoing initiatives related to pricing adjustments, SKU rationalization and improved product mix are beginning to take hold, even as we work through higher input costs and near-term operational inefficiencies tied to production transitions.
"At the same time, we are seeing very encouraging momentum across our franchise development pipeline. We currently have two new stores under construction and announced a new Area Development Agreement with four franchisees that will bring 34 new stores to market, reflecting growing interest from well-capitalized, financially sophisticated, multi-unit operators who are aligned with our refreshed strategy and brand direction. Our franchise development team is actively working to capitalize on new franchise opportunities, supported by improved digital marketing and a targeted approach to identifying the right partners for long-term success."
"Subsequent to quarter end," Geygan continued, "we took important steps to strengthen our financial position by completing a $2.7 million equity capital raise, allowing us to reduce leverage and reinforce our balance sheet with additional working capital. This improved liquidity provides greater flexibility to invest in our operations and advance key strategic initiatives.
"As we continue through our transformational process, we are increasingly focused on leveraging the tools and capabilities we've put in place to drive stronger execution across the system. With over 120 franchise stores now live on our new point-of-sale platform, we expect to have greater visibility into customer behavior and store-level performance, enabling more informed, data-driven decisions that can enhance franchisee performance over time. Further, our recently launched third-party delivery and catering service integration expands digital capabilities and off-premise access while preserving attractive economics for our franchise partners. Alongside a broader set of operational and technology initiatives underway, we believe these efforts are strengthening system-wide visibility and execution as we continue to scale."
Fiscal Third Quarter 2026 Financial Results vs. Year-Ago Quarter
-- Total revenue was $7.5 million for the third quarter of fiscal 2026
compared to $7.9 million in the year-ago quarter, reflecting the
Company's intentional exit from lower-margin specialty and wholesale
channels as part of its margin-first strategy. The decline was partially
offset by the benefit of pricing actions across various SKUs.
-- Total product and retail gross profit increased to $1.4 million in the
third quarter of fiscal 2026 compared to $0.7 million in the year-ago
quarter, driven by pricing actions, improved product mix and labor
efficiencies. While these gains were partially offset by short-term
operational inefficiencies relating to higher raw material and freight
costs, the Company continues to optimize its manufacturing and cost
structure.
-- Total costs and expenses improved to $7.5 million in the third quarter of
fiscal 2026, down from $8.6 million in the year-ago quarter with savings
realized across nearly all areas of operations.
-- Net loss was $0.2 million or $(0.02) per share for the third quarter of
fiscal 2026, compared to a net loss of $0.8 million or $(0.11) per share
in the year-ago quarter.
-- EBITDA was $0.4 million in the third quarter of fiscal 2026 compared to
$(0.4) million in the year-ago quarter, with the improvement driven by
the aforementioned increase in gross profit and lower costs and expenses.
Conference Call Information
The Company will conduct a conference call to discuss its financial results. A question-and-answer session will follow management's opening remarks. The conference call details are as follows:
Date: Wednesday, January 14, 2026
Time: 9:00 a.m. Eastern time
Dial-in registration link: here
Live webcast registration link: here
Please dial into the conference call 5-10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting to the conference call, please contact the Company's investor relations team at RMCF@elevate-ir.com.
The conference call will also be broadcast live and available for replay in the investor relations section of the Company's website at https://ir.rmcf.com/.
About Rocky Mountain Chocolate Factory, Inc.
Rocky Mountain Chocolate Factory, Inc. is a leading franchiser of a premium chocolate and confectionary retail store concept. As America's Chocolatier(TM), the Company has been producing an extensive line of premium chocolates and other confectionery products, including gourmet caramel apples since 1981. Headquartered in Durango, Colorado, Rocky Mountain Chocolate Factory is ranked among Entrepreneur's Franchise 500$(R)$ for 2025 and Franchise Times' Franchise 400(R) for 2024. The Company and its franchisees and licensees operate over 250 Rocky Mountain Chocolate Factory stores across the United States, with several international locations. The Company's common stock is listed on the Nasdaq Global Market under the symbol "RMCF."
Forward-Looking Statements
This press release includes statements of our expectations, intentions, plans, and beliefs that constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are intended to come within the safe harbor protection provided by those sections. These forward-looking statements involve various risks and uncertainties. The statements, other than statements of historical fact, included in this press release are forward-looking statements. Many of the forward-looking statements contained in this document may be identified by the use of forward-looking words such as "will," "intend," "believe," "expect," "anticipate," "should," "plan," "estimate," "potential," "may," "would," "could," "continue," "likely," "might," "seek," "outlook," "explore," or the negative of these terms or other similar expressions. However, the absence of these words or similar expressions does not mean that a statement is not forward-looking. All statements that address operating performance, events or developments that we expect or anticipate will occur in the future, including statements regarding future financial and operating results, our business strategy and plan, our strategic priorities, our store pipeline, and our transformation, are forward-looking statements. Management of the Company believes that these forward-looking statements are reasonable as and when made. However, caution should be taken not to place undue reliance on any such forward-looking statements because such statements speak only as of the date of this press release. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. In addition, forward-looking statements are subject to certain risks and uncertainties that could cause the Company's actual results to differ materially from historical experience and our present expectations or projections. These risks and uncertainties include, but are not limited to: inflationary impacts, the outcome of legal proceedings, changes in the confectionery business environment, seasonality, consumer interest in our products, receptiveness of our products internationally, consumer and retail trends, costs and availability of raw materials, competition, the success of our co-branding strategy, the success of international expansion efforts, financial covenants in our credit agreements, and the effect of government regulations. For a detailed discussion of the risks and uncertainties that may cause our actual results to differ from the forward-looking statements contained herein, please see the section entitled "Risk Factors" contained in our periodic reports, each filed with the Securities and Exchange Commission.
GAAP to Non-GAAP Financial Measures
This press release includes a non-GAAP financial measure, EBITDA, which the Company defines as net earnings attributable to the Company before interest expense, taxes on income, and depreciation and amortization. A reconciliation of EBITDA with GAAP net earnings attributable to the three months ended November 30, 2025 and 2024 is included in this press release.
Investor Contact
Sean Mansouri, CFA
Elevate IR
720-330-2829
RMCF@elevate-ir.com
Rocky Mountain Chocolate Factory, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands, except share and per share amounts)
February 28,
November 30, 2025 (unaudited) 2025
Assets
Current Assets
Cash and cash
equivalents $ 641 $ 720
Accounts
receivable, less
allowance for
credit losses of
$157 and $307,
respectively 3,851 3,405
Notes receivable,
current portion,
less current
portion of the
allowance for
credit losses of
$28 66 11
Refundable income
taxes 64 64
Inventories 3,962 4,630
Other 481 393
Total current
assets 9,065 9,223
Property and Equipment,
Net 8,820 9,409
Other Assets
Notes receivable,
net of current
portion 51 69
Goodwill 576 576
Intangible assets,
net 190 210
Lease right of use
asset 1,430 1,241
Other 596 447
Total other assets 2,843 2,543
---- -------------------- --- ---------
Total Assets $ 20,728 $ 21,175
Liabilities and
Stockholders' Equity
Current Liabilities
Accounts payable $ 3,450 $ 4,816
Accrued salaries
and wages 636 697
Gift card
liabilities 652 649
Other accrued
expenses 162 80
Contract
liabilities 103 139
Lease liability,
current portion 460 488
Total current
liabilities 5,463 6,869
---- -------------------- --- ---------
Notes payable 7,770 5,957
Lease liability, less
current portion 992 770
Contract liabilities,
less current
portion 497 604
Total Liabilities 14,722 14,200
Commitments and
Contingencies
Stockholders' Equity
Preferred stock,
$0.001 par value
per share; 250,000
authorized; 0
shares issued and
outstanding - -
Common stock,
$0.001 par value,
46,000,000 shares
authorized,
7,804,230 shares
and 7,722,174
shares issued and
outstanding,
respectively 8 8
Additional paid-in
capital 12,527 12,355
Dividends
Accumulated deficit (6,529) (5,388)
Total stockholders'
equity 6,006 6,975
Total Liabilities and
Stockholders' Equity $ 20,728 $ 21,175
Rocky Mountain Chocolate Factory, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(In thousands, except share and per share amounts)
(Unaudited)
Three Months Ended Nine Months Ended
November 30, November 30,
2025 2024 2025 2024
----------- -----------
Revenues
Sales $ 6,332 $ 6,719 $ 16,233 $ 16,916
Franchise and royalty fees 1,211 1,174 4,506 3,764
Total Revenue 7,543 7,893 20,739 20,680
Costs and Expenses
Cost of sales 4,979 6,044 14,587 15,980
Franchise costs 590 616 1,737 2,109
Sales and marketing 242 272 671 840
General and administrative 1,158 1,427 3,135 4,288
Retail operating 380 171 813 564
Depreciation and amortization,
exclusive of depreciation and
amortization expense of $233,
$211, $698 and $598,
respectively, included in cost
of sales 112 63 338 143
Total costs and expenses 7,461 8,593 21,281 23,924
--------- --------- --------- ---------
Income (Loss) from Operations 82 (700) (542) (3,244)
Other Income (Expense)
Interest expense (243) (160) (621) (258)
Interest income 6 7 22 21
Gain on disposal of assets - 6 - 254
Other (expense) income, net (237) (147) (599) 17
Loss Before Income Taxes (155) (847) (1,141) (3,227)
Income Tax Provision (Benefit) - - - -
Net Loss $ (155) $ (847) $ (1,141) $ (3,227)
Basic Loss per Common Share $ (0.02) $ (0.11) $ (0.15) $ (0.47)
Diluted Loss per Common Share $ (0.02) $ (0.11) $ (0.15) $ (0.47)
Weighted Average Common Shares
Outstanding - Basic 7,799,396 7,643,690 7,775,948 6,883,263
Dilutive Effect of Employee Stock
Awards - - - -
Weighted Average Common Shares
Outstanding - Diluted 7,799,396 7,643,690 7,775,948 6,883,263
Rocky Mountain Chocolate Factory, Inc. and Subsidiaries
Condensed Consolidated Computation of EBITDA
(In thousands -- Unaudited)
Three Months Ended November 30,
FY26 FY25
----------------------- -----------------------
Net Loss $ (155) $ (847)
Depreciation &
Amortization 345 274
Interest 237 153
----------------------- -----------------------
EBITDA $ 427 $ (420)
---------------------- ------------------- ------------
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