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Rocky Mountain (RMCF) Q1 Earnings and Revenues Decline Y/Y
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Rocky Mountain Chocolate Factory, Inc. (RMCF - Free Report) delivered a loss per share of 26 cents in the first quarter of fiscal 2025, wider than the year-ago quarter’s loss of 13 cents per share.
Revenues in Detail
Rocky Mountain registered revenues of $6.4 million in the fiscal first quarter, down 0.5% year over year.
Lower revenues from royalty and marketing fees dampened the topline.
Segment Details
Rocky Mountain derives revenues from three sources — Durango product and retail sales, Franchise fees and Royalty and marketing fees.
For the quarter under review, Durango product and retail sales reported revenues of $5.3 million, up 5.2% from the year-ago quarter. This primarily resulted from improved year-over-year franchisee demand and improved inventory management.
The revenues from the Franchise fees totaled $0.1 million, up 55.6 % year over year. The uptick was primarily the result of store ownership transfer fees received.
The Royalty and marketing fees generated revenues of $1.1 million, down 23.1% from the year-ago quarter. This was primarily due to a decrease in stores year over year that are subject to royalty fees.
Rocky Mountain Chocolate Factory, Inc. Price, Consensus and EPS Surprise
In the quarter under review, Rocky Mountain’s gross margin decreased to (5.8)% from a gross margin of 5.1% in the year-ago quarter. This primarily resulted from increased raw material and labor costs.
Operating Expenses Analysis
Sales and marketing expenses decreased 9.1% year over year to $0.4 million, primarily due to operational efficiencies and cost-cutting measures.
General and administrative expenses decreased 35.9% year over year to $1.2 million due to a decrease in legal fees that were incurred in the prior year related to contested solicitation of proxies.
Profitability
Loss from operations totaled $1.6 million, wider than the year-ago quarter’s loss of $1.5 million.
In the fiscal first quarter, Rocky Mountain’s net loss was $1.7 million, wider than the year-ago quarter’s net loss of $0.8 million.
Liquidity & Debt Management
Rocky Mountain exited first-quarter fiscal 2025 with cash and cash equivalents of $0.6 million compared with $2.1 million at the fiscal 2024-end.
Net cash used in operating activities of continuing operations at the end of first-quarter fiscal 2025 was $2.2 million compared with $0.4 million a year ago.
Our Take
Rocky Mountain exited the first quarter of fiscal 2025 with dismal top-line and bottom-line results. Lower revenues from Royalty and marketing fees were also discouraging. During the reported quarter, the gross margin contracted, which did not bode well. The company incurred a net loss in the quarter, which is also discouraging.
On a positive note, robust revenues from Durango product and retail sales and Franchise fees were impressive.
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Rocky Mountain (RMCF) Q1 Earnings and Revenues Decline Y/Y
Rocky Mountain Chocolate Factory, Inc. (RMCF - Free Report) delivered a loss per share of 26 cents in the first quarter of fiscal 2025, wider than the year-ago quarter’s loss of 13 cents per share.
Revenues in Detail
Rocky Mountain registered revenues of $6.4 million in the fiscal first quarter, down 0.5% year over year.
Lower revenues from royalty and marketing fees dampened the topline.
Segment Details
Rocky Mountain derives revenues from three sources — Durango product and retail sales, Franchise fees and Royalty and marketing fees.
For the quarter under review, Durango product and retail sales reported revenues of $5.3 million, up 5.2% from the year-ago quarter. This primarily resulted from improved year-over-year franchisee demand and improved inventory management.
The revenues from the Franchise fees totaled $0.1 million, up 55.6 % year over year. The uptick was primarily the result of store ownership transfer fees received.
The Royalty and marketing fees generated revenues of $1.1 million, down 23.1% from the year-ago quarter. This was primarily due to a decrease in stores year over year that are subject to royalty fees.
Rocky Mountain Chocolate Factory, Inc. Price, Consensus and EPS Surprise
Rocky Mountain Chocolate Factory, Inc. price-consensus-eps-surprise-chart | Rocky Mountain Chocolate Factory, Inc. Quote
Rocky Mountain Gross Margin
In the quarter under review, Rocky Mountain’s gross margin decreased to (5.8)% from a gross margin of 5.1% in the year-ago quarter. This primarily resulted from increased raw material and labor costs.
Operating Expenses Analysis
Sales and marketing expenses decreased 9.1% year over year to $0.4 million, primarily due to operational efficiencies and cost-cutting measures.
General and administrative expenses decreased 35.9% year over year to $1.2 million due to a decrease in legal fees that were incurred in the prior year related to contested solicitation of proxies.
Profitability
Loss from operations totaled $1.6 million, wider than the year-ago quarter’s loss of $1.5 million.
In the fiscal first quarter, Rocky Mountain’s net loss was $1.7 million, wider than the year-ago quarter’s net loss of $0.8 million.
Liquidity & Debt Management
Rocky Mountain exited first-quarter fiscal 2025 with cash and cash equivalents of $0.6 million compared with $2.1 million at the fiscal 2024-end.
Net cash used in operating activities of continuing operations at the end of first-quarter fiscal 2025 was $2.2 million compared with $0.4 million a year ago.
Our Take
Rocky Mountain exited the first quarter of fiscal 2025 with dismal top-line and bottom-line results. Lower revenues from Royalty and marketing fees were also discouraging. During the reported quarter, the gross margin contracted, which did not bode well. The company incurred a net loss in the quarter, which is also discouraging.
On a positive note, robust revenues from Durango product and retail sales and Franchise fees were impressive.