Earnings call transcript: Rocky Mountain Chocolate Factory posts mixed Q2 2027 results

Rocky Mountain Chocolate Factory released its second quarter 2027 financial results, revealing mixed outcomes. Revenue totaled $6.7 million, a 1.5% decrease from the previous year's $6.8 million. The company reported a net loss of $1.3 million, or $0.14 per share, compared to a $0.7 million loss, or $0.09 per share, in the same period last year.

Notably, the company's gross margin improved to 8% from a negative 0.6%, indicating better production efficiency. Despite this, the net loss widened due to higher administrative costs. The company's product sales increased by 2%, showing resilience in core demand. Shares ended the trading day at $0.935, up 2.34% from the previous close.

Inventory decreased by 36.6% from the end of fiscal 2026, improving working capital. Management is currently reviewing strategic options, including possible financing, sale, merger, or going-private transactions. The company's leadership is focused on executing for the holiday season, supporting franchisees and company-owned stores, and managing its balance sheet.

The company has completed a sale-leaseback of its Durango facility, using the proceeds to repay promissory notes. Additionally, it entered a new $2 million loan with Alpine Bank, due in October 2028, at prime plus 1%.