Rocky Mountain Chocolate Factory 2025 Q4 Earnings Misses Targets as Net Income Widens by 81.7%

Rocky Mountain Chocolate Factory (RMCF) reported its fiscal 2025 Q4 earnings on Jun 20th, 2025. The company posted revenue growth of 22.6%, but net income results missed expectations with losses deepening significantly. Despite this, RMCF has adjusted its guidance, anticipating positive growth in fiscal '26. The company plans to implement new pricing strategies to increase gross profit, aiming to reverse the decline in store counts and achieve profitability.

Revenue
The total revenue of Rocky Mountain Chocolate Factory increased by 22.6% to $8.90 million in 2025 Q4, up from $7.26 million in 2024 Q4.

Earnings/Net Income
Rocky Mountain Chocolate Factory's losses deepened to $0.38 per share in 2025 Q4 from a loss of $0.25 per share in 2024 Q4 (49.1% wider loss). Meanwhile, the company's net loss widened to $-2.90 million in 2025 Q4, representing an 81.7% increase from the $-1.59 million loss recorded in 2024 Q4. The results indicate a negative trend in EPS performance.

Price Action
The stock price of Rocky Mountain Chocolate Factory has tumbled 11.04% during the latest trading day, has surged 15.10% during the most recent full trading week, and has surged 18.10% month-to-date.

Post-Earnings Price Action Review
The strategy of buying Rocky Mountain Chocolate Factory (RMCF) shares after a revenue drop quarter-over-quarter on the financial report release date and holding for 30 days resulted in significant underperformance. This approach had a CAGR of -47.41%, with an excess return of -144.34% and a Sharpe ratio of -0.92, highlighting poor risk-adjusted returns. The strategy also experienced a maximum drawdown of -86.16%, reflecting high volatility and risk. Holding RMCF shares for 30 days after a revenue drop led to substantial losses, significantly underperforming the benchmark.

CEO Commentary
Jeff Geygan, Interim CEO of Rocky Mountain Chocolate Factory, emphasized that fiscal Q4 did not meet profitability expectations, but the company undertook significant foundational changes to revamp operations and culture. Key actions included transitioning consumer packaging in-house to improve fulfillment and reduce costs, resulting in an estimated annual savings of $1.5 million. The company also realigned pricing strategies to enhance financial health while focusing on franchise growth through strategically planned openings and transfers. Geygan conveyed optimism, stating, "We fully expect to return to profitability in fiscal '26 with a strong foundation in place and a new level of discipline across the business."

Guidance
Rocky Mountain Chocolate Factory anticipates achieving several million dollars in additional gross profit in fiscal '26 due to new pricing strategies. The company expects to end a decade-long decline in store counts and is targeting positive growth with new store openings. Geygan highlighted a commitment to returning to profitability in fiscal '26, supported by the recent investments in systems and a healthy franchise network. The capital expenditure for fiscal '26 is projected to be modest, primarily focused on maintenance rather than new investments.

Additional News
Recently, Rocky Mountain Chocolate Factory announced intentions to file a Form 12b-25 with the SEC, granting an automatic extension to file its Fiscal 2025 10-K. This decision was made to ensure accurate and comprehensive financial reporting. Additionally, the company has launched strategic initiatives to modernize operations, including new store openings in Charleston and planned expansions in Chicago, aiming to enhance brand presence and reach. The company remains committed to restructuring efforts and anticipates improved performance and stability in the coming fiscal year.