Rocky Mountain Chocolate Factory Reports Fiscal Second Quarter 2027 Financial Results

Gross margin returned to positive territory, while post-quarter financing repaid 12% debt and added a new bank loan.

Rhea-AI Summary

Rocky Mountain Chocolate Factory (RMCF) reported a wider fiscal second-quarter 2027 net loss of $1.281 million for the quarter ended August 31, 2026. Revenue declined to $6.652 million from $6.823 million a year earlier, while net loss widened from $662,000. Loss per share was $0.14 versus $0.09. Product and retail gross margin improved to 8.0% from negative 0.6%, but total costs and expenses rose to $7.737 million from $7.302 million.

On October 16, 2026, the company completed a $6.6 million sale-leaseback of its Durango manufacturing facility with American Heritage Legacies. Proceeds repaid $6.6 million of debt bearing 12% annual interest; prepayment penalties and related costs were $300,000. A separate Alpine Bank loan provided $2 million, bearing prime plus 1% and maturing October 16, 2028. A board committee is exploring strategic alternatives and has received third-party expressions of interest.

7 points · 1 major

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0 major · 21 points

How the balance works

Positive

• Major pointDurango sale-leaseback proceeds repaid $6.6 million of debt bearing 12% annual interest. 77% of market cap
• Moderate pointQuarterly product and retail gross margin improved to 8.0% from negative 0.6% a year earlier.
• Moderate pointSix-month gross profit increased to $602,000 from $292,000 a year earlier.
• Moderate pointAlpine Bank financing provided $2.0 million for working capital on October 16, 2026. 23% of market cap
• Minor pointQuarterly sales increased to $5.310 million from $5.183 million a year earlier.

2 minor points

• Minor pointSix-month sales increased to $10.191 million from $9.900 million a year earlier.
• Minor pointChino Hills acquisition completed in July 2026, adding a company-owned store.

Negative

• Moderate pointQuarterly revenue declined to $6.652 million from $6.823 million a year earlier.
• Moderate pointQuarterly net loss widened to $1.281 million, or $0.14 per share, from $662,000, or $0.09.
• Moderate pointQuarterly franchise and royalty fees fell to $1.342 million from $1.640 million a year earlier.
• Moderate pointCash declined to $416,000 at August 31, 2026, from $1.218 million at February 28, 2026.
• Moderate pointCurrent liabilities of $13.605 million exceeded current assets of $7.077 million at August 31, 2026.
• Moderate pointStockholders’ equity declined to $3.026 million at August 31, 2026, from $5.229 million at February 28, 2026.
• Moderate pointDebt repayment incurred $300,000 in prepayment penalties and related costs. 3.5% of market cap

14 minor points

• Minor pointQuarterly operating loss widened to $1.085 million from $479,000 a year earlier.
• Minor pointQuarterly costs and expenses rose to $7.737 million from $7.302 million a year earlier.
• Minor pointQuarterly interest expense increased to $211,000 from $190,000 a year earlier.
• Minor pointQuarterly non-GAAP loss before interest, taxes, depreciation and amortization widened to $712,000 from $133,000.
• Minor pointSix-month revenue declined to $12.765 million from $13.196 million a year earlier.
• Minor pointSix-month net loss widened to $2.449 million, or $0.26 per share, from $986,000, or $0.13.
• Minor pointSix-month operating loss widened to $2.091 million from $624,000 a year earlier.
• Minor pointSix-month costs and expenses increased to $14.856 million from $13.820 million a year earlier.
• Minor pointSix-month franchise and royalty fees fell to $2.574 million from $3.296 million a year earlier.
• Minor pointSix-month interest expense increased to $419,000 from $378,000 a year earlier.
• Minor pointSix-month non-GAAP loss before interest, taxes, depreciation and amortization was $1.352 million, versus $67,000 earnings.
• Minor pointOutstanding common shares increased to 9,518,636 at August 31, 2026, from 9,354,620 at February 28, 2026.
• Minor pointAlpine Bank debt bears prime plus 1% and matures October 16, 2028.
• Minor pointDurango facility lease commenced October 16, 2026, alongside completion of the property sale.

News Explained

As of August 31, 2026, RMCF reported 9,518,636 common shares issued and outstanding, versus 9,354,620 at February 28, 2026; for holders whose share count did not change, the higher total means a smaller ownership percentage.

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Key Figures

Total revenue: $6.7 million vs. $6.8 million Gross margin: 8.0% vs. (0.6)% Net loss: $1.3 million vs. $0.7 million +5 more

Total revenue

$6.7 million vs. $6.8 million

Fiscal Q2 2027 vs. fiscal Q2 2026

Gross margin

8.0% vs. (0.6)%

Fiscal Q2 2027 vs. fiscal Q2 2026

Net loss

$1.3 million vs. $0.7 million

Fiscal Q2 2027 vs. fiscal Q2 2026

EBITDA loss

$0.7 million vs. $0.1 million

Fiscal Q2 2027 vs. fiscal Q2 2026

Sale-leaseback transaction

$6.6 million

Completed for the Durango manufacturing facility

Interest on repaid debt

12% per annum

Debt repaid using sale proceeds

Prepayment penalties and related costs

$0.3 million

Incurred in connection with debt repayment

Working-capital loan advance

$2.0 million

Advance received from Alpine Bank

Previous Earnings Reports

2 past events · Latest: Jul 14

Same Type 2 events

1. Jul 14

   1Q27 earnings

   24h Move

   -2.0%

   Revenue fell year over year while net loss widened and EBITDA turned to a loss.

2. Oct 13

   2Q26 earnings

   24h Move

   -7.1%

   Revenue rose year over year, but product and retail gross profit swung to a loss.

24h Move is the share-price change in the day after each event; other market factors may also have contributed.

Key Terms

sale-leaseback, erp, ebitda, non-gaap, +1 more

5 terms

sale-leaseback financial

"a $6.6 million sale-leaseback transaction"

A sale-leaseback is a deal where an owner sells an asset—commonly real estate or equipment—to another party and immediately rents it back so they can keep using it. For investors, it matters because the seller converts a fixed asset into cash without disrupting operations, which can boost liquidity or pay down debt but also creates ongoing lease payments and long-term obligations that affect cash flow and the balance sheet.

erp technical

"combined with our ERP capabilities"

ERP, or Enterprise Resource Planning, is a comprehensive software system that helps organizations manage and integrate core business processes such as finance, supply chain, and human resources in one unified platform. For investors, ERP systems can indicate how efficiently a company operates; strong and well-integrated systems often suggest good management and potential for sustainable growth.

ebitda financial

"EBITDA loss was $0.7 million"

EBITDA stands for earnings before interest, taxes, depreciation, and amortization. It measures a company's profitability by focusing on the money it makes from its core operations, ignoring expenses like taxes and accounting adjustments. Investors use EBITDA to compare how well different companies are performing financially, as it provides a clearer picture of operational success without the influence of financial structure or accounting choices.

View in glossary

non-gaap financial

"non-GAAP financial measures, EBITDA loss and Adjusted Gross Margin"

Non-GAAP refers to financial measures that companies use to show their earnings or performance without including certain expenses or income that are often added back to give a different picture. It matters because it can make a company's results look better or more favorable, but it may also hide important costs, so investors need to look at both GAAP (official rules) and non-GAAP numbers to get a full understanding.

View in glossary

prime rate financial

"bears interest at the prime rate plus 1%"

The prime rate is the interest rate banks typically charge their most creditworthy customers for short-term loans and serves as a common baseline for many other interest rates. Think of it as a price tag for borrowing: when the prime rate rises, costs for business loans, mortgages and consumer credit usually go up, which can slow spending, squeeze profits and influence stock prices and interest-sensitive sectors.

AI-generated analysis. How Rhea-AI works. Not financial advice.

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Management to Host Conference Call Monday at 5:00 p.m. ET

DURANGO, Colo., Oct. 19, 2026 (GLOBE NEWSWIRE) -- Rocky Mountain Chocolate Factory, Inc. (Nasdaq: RMCF) (the “Company” or “RMCF”), America’s Chocolatier^® since 1981, is reporting financial and operating results for its second quarter of fiscal 2027, which ended August 31, 2026.

"Since stepping into the Interim CEO role, I have been encouraged by the way our leadership team has come together around a shared set of priorities for the business," said Allen Harper, Interim CEO. "With COO David Denker leading our day-to-day operations, our teams are increasingly aligned across the business. That alignment is strengthening accountability and decision-making as we build a stronger organization and position Rocky Mountain Chocolate Factory for sustainable growth and long-term shareholder value."

David Denker, Chief Operating Officer, added, "During the second quarter, we made progress improving production and execution across the business. August was our highest production and shipping month of the calendar year. Increasing production volume from our Durango facility remains a key priority as we prepare for the holiday season. Enhancements to our reporting platform, combined with our ERP capabilities, are providing our teams with greater visibility into demand, inventory and production requirements. These operational improvements, together with our continued focus on production efficiency and execution, contributed to the recovery in gross margin during the quarter. We believe there is additional opportunity to build on this progress as we move through the holiday season.”

Mr. Denker continued, “The acquisition of Chino Hills in July 2026 expanded our company-owned store base to five locations, while new franchised stores opened in Folsom, California, and Tinton Falls, New Jersey. As we grow our footprint and continue to enhance operations, we remain focused on consistent execution, supporting our franchisees and preserving the product quality and longstanding recipes that distinguish Rocky Mountain Chocolate Factory.”

Fiscal Second Quarter 2027 Financial Results vs. Fiscal Second Quarter 2026

• Total revenue was $6.7 million for the second quarter of fiscal 2027 compared to $6.8 million in the second quarter of fiscal 2026. Primarily due to lower Durango product sales and royalty and marketing fees which offset the increase in retail sales, driven by the larger company-owned store base and price increases.
• Total product and retail gross profit increased to $0.4 million in the second quarter of fiscal 2027 compared to a gross loss of less than $0.1 million in the second quarter of fiscal 2026. Gross margin improved to 8.0% from (0.6)%, reflecting pricing actions and production efficiencies.
• Total costs and expenses were $7.7 million in the second quarter of fiscal 2027, up from $7.3 million in the second quarter of fiscal 2026. The increase primarily reflects the larger company-owned store base and higher franchise and general and administrative costs. These increases were partially offset by lower cost of sales and sales and marketing expenses.
• Net loss was $1.3 million or $(0.14) per share for the second quarter of fiscal 2027, compared to a net loss of $0.7 million or $(0.09) per share in the second quarter of fiscal 2026.
• EBITDA loss was $0.7 million in the second quarter of fiscal 2027 compared to a loss of $0.1 million in the second quarter of fiscal 2026.

In the fiscal second quarter, the Board formed a strategic committee, which with the assistance of its advisors, is exploring strategic alternatives that may be available to the Company. Alternatives may include, among other things, a possible sale, merger, or other business combination, or a going-private transaction. In connection with this process, the Company has received expressions of interest from third parties. There can be no assurance that this review of strategic alternatives will result in any transaction or other strategic change.

Subsequent Events

Subsequent to quarter end, the Company completed a $6.6 million sale-leaseback transaction with American Heritage Legacies, LLC for its manufacturing facility located in Durango, Colorado. The sale was completed and the lease commenced on October 16, 2026. Net proceeds from the sale of the property have been used to repay $6.6 million in debt, which bears interest at 12% per annum. In connection with the repayment, the Company incurred prepayment penalties and related costs of $0.3 million.

On October 16, 2026, the Company entered into a loan agreement with Alpine Bank, where the Company received an advance of $2.0 million for working capital purposes. The loan matures on October 16, 2028, and bears interest at the prime rate plus 1%. Additional information is included in the Company’s Quarterly Report on Form 10-Q for the quarter ended August 31, 2026.

Conference Call Information

The Company will conduct a conference call to discuss its financial results. There will be no question-and-answer session. The conference call details are as follows:

Date: Monday, October 19, 2026
Time: 5:00 p.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 with 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 franchisor, manufacturer and retailer of premium chocolates and other confectionery products. As America’s Chocolatier^® since 1981, the Company produces an extensive assortment of premium chocolates, gourmet caramel apples and other handcrafted confections. Headquartered in Durango, Colorado, Rocky Mountain Chocolate Factory is ranked among Entrepreneur’s Franchise 500^® for 2026. Together with its franchisees and licensees, the Company operates approximately 250 Rocky Mountain Chocolate Factory locations across the United States and internationally. The Company’s common stock is listed on the Nasdaq Capital 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," or 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 and anticipated outcomes of our business strategy and plan, our liquidity and ability to continue as a going concern, our strategic review and any resulting transaction, the anticipated benefits of the sale-leaseback of our Durango facility and our credit facility with Alpine Bank, our efforts to improve production, fulfillment and distribution and pursuit of higher-margin product opportunities 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 our 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, 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 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.

Investor Contact

Sean Mansouri, CFA
Elevate IR
(720) 330-2829
RMCF@elevate-ir.com

Media Contact

Raymond Barrett
Director of Marketing
(305) 801-5641
rbarrett@rmcf.net

Rocky Mountain Chocolate Factory, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(In thousands, except share and per share amounts)
(Unaudited)
	Three Months Ended								Six Months Ended
	August 31,								August 31,
	2026				2025				2026				2025
Revenues
Sales	$	5,310			$	5,183			$	10,191			$	9,900
Franchise and royalty fees		1,342				1,640				2,574				3,296
Total revenue		6,652				6,823				12,765				13,196
Costs and Expenses
Cost of sales		4,887				5,216				9,589				9,608
Franchise costs		784				552				1,275				1,147
Sales and marketing		162				223				352				429
General and administrative		1,328				976				2,608				1,977
Retail operating		435				227				752				433
Depreciation and amortization, exclusive of depreciation and amortization expense of $232, $238, $459 and $465, respectively, included in cost of sales		141				108				280				226
Total costs and expenses		7,737				7,302				14,856				13,820
Loss from Operations		(1,085	)			(479	)			(2,091	)			(624	)
Other Income (Expense)
Interest expense		(211	)			(190	)			(419	)			(378	)
Interest income		15				7				61				16
Other (expense) income, net		(196	)			(183	)			(358	)			(362	)
Loss Before Income Taxes		(1,281	)			(662	)			(2,449	)			(986	)
Income Tax Provision (Benefit)		-				-				-				-
Net Loss	$	(1,281	)		$	(662	)		$	(2,449	)		$	(986	)
Basic Loss per Common Share	$	(0.14	)		$	(0.09	)		$	(0.26	)		$	(0.13	)
Diluted Loss per Common Share	$	(0.14	)		$	(0.09	)		$	(0.26	)		$	(0.13	)
Weighted Average Common Shares Outstanding - Basic		9,447,259				7,786,384				9,418,824				7,764,351
Dilutive Effect of Employee Stock Awards		-				-				-				-
Weighted Average Common Shares Outstanding - Diluted		9,447,259				7,786,384				9,418,824				7,764,351

Rocky Mountain Chocolate Factory, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands, except share and per share amounts)
	August 31, 2026 (unaudited)				February 28, 2026
Assets
Current Assets
Cash and cash equivalents	$	416			$	1,218
Accounts receivable, less allowance for credit losses of $128 and $128, respectively		2,951				2,545
Notes receivable, current portion, less current portion of the allowance for credit losses of $28 and $28, respectively		63				59
Refundable income taxes		56				58
Inventories		2,588				4,057
Prepaid expenses		1,003				831
Total current assets		7,077				8,768
Property and Equipment, Net		8,724				8,775
Other Assets
Notes receivable		6				36
Goodwill		576				576
Intangible assets, net		691				733
Lease right of use asset		1,706				1,310
Other		14				14
Total other assets		2,993				2,669
Total Assets	$	18,794			$	20,212
Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable	$	4,922			$	5,088
Accrued salaries and wages		441				406
Notes payable		6,780				-
Gift card liabilities		654				654
Other accrued expenses		286				64
Contract liabilities		106				105
Lease liability		416				282
Total current liabilities		13,605				6,599
Notes payable, less current portion		114				6,568
Lease liability, less current portion		1,324				1,054
Contract liabilities, less current portion		538				575
Deferred income taxes		187				187
Total Liabilities		15,768				14,983
Commitments and Contingencies
Stockholders' Equity
Preferred stock, $0.001 par value per share; 250,000 shares authorized; 0 shares issued and outstanding		-				-
Common stock, $0.001 par value, 46,000,000 shares authorized, 9,518,636 shares and 9,354,620 shares issued and outstanding, respectively		10				9
Additional paid-in capital		15,413				15,168
Accumulated deficit		(12,397	)			(9,948	)
Total stockholders' equity		3,026				5,229
Total Liabilities and Stockholders' Equity	$	18,794			$	20,212

Rocky Mountain Chocolate Factory, Inc. and Subsidiaries
Condensed Consolidated Computation of Adjusted Gross Margin
(In Thousands)
(Unaudited)
	Three Months Ended August 31,								Six Months Ended August 31,
	2026				2025				2026				2025
Total gross margin	$	423			$	(33	)		$	602			$	292
Plus: depreciation and amortization		232				238				459				465
Total Adjusted Gross Margin (non-GAAP measure)	$	655			$	205			$	1,061			$	757
Total Adjusted Gross Margin (non-GAAP measure)		12.3	%			4.0	%			20.0	%			14.6	%

Rocky Mountain Chocolate Factory, Inc. and Subsidiaries
Condensed Consolidated Computation of EBITDA
(In Thousands)
(Unaudited)
	Three Months Ended August 31,								Six Months Ended August 31,
	2026				2025				2026				2025
Net loss	$	(1,281	)		$	(662	)		$	(2,449	)		$	(986	)
Plus: depreciation and amortization		373				346				739				691
Plus: interest		196				183				358				362
Total EBITDA loss	$	(712	)		$	(133	)		$	(1,352	)		$	67

Non-GAAP Financial Measures

This press release includes non-GAAP financial measures, EBITDA loss and Adjusted Gross Margin. The Company defines EBITDA loss as net earnings before interest, taxes on income, and depreciation and amortization. The Company defines Adjusted Gross Margin as gross margin plus depreciation and amortization included in the cost of sales. Reconciliations of EBITDA loss and Adjusted Gross Margin with their most directly comparable GAAP measure is included in this press release.

These are supplemental measures of performance that are not required by, or presented in accordance with, GAAP. The Company believes Adjusted Gross Margin is useful to investors, as a supplement to gross margin and other performance measures calculated in accordance with GAAP, because it provides a measure of operating performance that is unaffected by non-cash depreciation and amortization. Management also uses Adjusted Gross Margin, rather than gross margin, to make incremental pricing decisions. The Company believes EBITDA (loss) is useful to investors because it helps them evaluate the Company's core operating performance without the effects of financing decisions, income taxes and non-cash depreciation and amortization, and management uses EBITDA (loss) to evaluate the Company's operating performance from period to period.

EBITDA (loss) and Adjusted Gross Margin have limitations as analytical tools because they exclude the impact of depreciation and amortization expense and, in the case of EBITDA (loss), interest and income taxes. They should not be considered in isolation or as a substitute for any measure reported under GAAP. The Company's use of capital assets makes depreciation and amortization expense a necessary element of its costs and its ability to generate income. Because of these limitations, the Company uses EBITDA (loss) and Adjusted Gross Margin only in conjunction with GAAP measures of performance, such as net loss and gross margin. In addition, other companies may calculate similarly titled measures differently, so the Company's non-GAAP financial measures may not be comparable to those of other companies.

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

What were Rocky Mountain Chocolate Factory’s fiscal second-quarter 2027 earnings?

Rocky Mountain Chocolate Factory reported a $1.281 million net loss, or $0.14 per share, for the quarter ended August 31, 2026. Revenue was $6.652 million. A year earlier, the company reported a $662,000 net loss, or $0.09 per share, on revenue of $6.823 million.

What did RMCF do with its Durango facility sale-leaseback proceeds?

The company used proceeds from the $6.6 million sale-leaseback to repay $6.6 million in debt bearing 12% annual interest. The transaction with American Heritage Legacies closed on October 16, 2026, when the lease also commenced. Prepayment penalties and related costs totaled $300,000.

What strategic alternatives is Rocky Mountain Chocolate Factory exploring?

The board’s strategic committee is exploring a possible sale, merger, other business combination or going-private transaction, among other alternatives. The committee was formed during the fiscal second quarter and is working with advisers. Third parties have expressed interest, but the review does not assure a transaction or other strategic change.

Why did RMCF’s gross margin improve in fiscal second-quarter 2027?

Rocky Mountain Chocolate Factory attributed the gross-margin improvement to pricing actions and production efficiencies. Management also linked the recovery to better reporting and operational execution. August was the company’s highest production and shipping month of the calendar year.