Rocky Mountain Chocolate Factory's Q2 2026: Contradictions Emerge on Franchise Strategy, E-commerce Launch, and Store Growth

The above is the analysis of the conflicting points in this earnings call

Business Commentary:

• Franchise Growth and Development:
• Rocky Mountain Chocolate Factory is experiencing renewed enthusiasm from both existing and prospective franchisees.

• This growth is driven by the company's new store design, which reduces the cost to build, and the hiring of a new VP of Franchise Development with a proven track record.

• Operational Improvements and Cost Efficiency:

• The company has initiated operational improvements, including eliminating overtime compensation, reducing scrap and waste, and enhancing in-stock items.

• These changes, spearheaded by the new VP of Operations, are aimed at increasing the ratio of Durango products sold in every store, thereby improving store profitability.

• Rebranding and Customer Engagement:

• Rocky Mountain Chocolate Factory has been modernizing nearly every customer touch point, including its logo, store design, packaging, and website.

• The rebranding efforts are designed to elevate the brand while maintaining its authentic and nostalgic appeal, enhancing customer engagement and store appeal.

• Production and Inventory Management:

• The company has improved its logistics by moving consumer packaging back to Durango and expanding warehouse capacity in Albuquerque.

• This has reduced transit time, improved responsiveness, and lowered transportation costs, contributing to profitability and efficient product fulfillment.

• Cocoa Pricing and Margin Improvement:

• Cocoa prices have eased from historic highs, with the current price per metric ton at $5,806.
• The company has locked in lower cocoa prices, which represents 40% of its raw material costs, expected to improve margins over time.