Executive Summary
Rocky Mountain Chocolate Factory Inc (RMCF) reported its Q3 2025 results highlighting a revenue increase of 2.54% year-over-year to $7.9 million, driven by a rise in product sales. Despite overall growth, the company faced challenges reflected in its net loss of $847,000 for the quarter. Management emphasized a strategic transformation aimed at revitalizing the franchise network and improving operational efficiencies, as noted by Interim CEO Jeff Geygan's commitment to maintaining liquidity and expanding store presence. Key future initiatives include the launch of a new ERP system, enhancements in e-commerce, and an improved marketing strategy to drive long-term profitability.
Key Performance Indicators
QoQ: -17.31% | YoY:-11.93%
Key Insights
**Revenue Performance**: Q3 revenue reached $7.9 million, up 2.54% YoY (vs. $7.7 million in Q3 2024) and up 23.71% QoQ.
**Profitability**: Gross profit was $1.849 million with a margin of 23.4%. The operating income was negative at -$700,000, showing a decline in operational health compared to the previous year.
**Cash Flow**: The net cash from operations was -$2.119 million, signaling ongoing cash flow challenges despite a cash balance of $1.089 million at quarter-end.
**Balance Sheet Health...
Financial Highlights
Revenue Performance: Q3 revenue reached $7.9 million, up 2.54% YoY (vs. $7.7 million in Q3 2024) and up 23.71% QoQ.
Profitability: Gross profit was $1.849 million with a margin of 23.4%. The operating income was negative at -$700,000, showing a decline in operational health compared to the previous year.
Cash Flow: The net cash from operations was -$2.119 million, signaling ongoing cash flow challenges despite a cash balance of $1.089 million at quarter-end.
Balance Sheet Health: Current ratio at 2.6 indicates good short-term liquidity. Long-term debt increased to $6 million, reflecting new credit facilities, while total liabilities now amount to $11.8 million, presenting a careful balance of growth and risk.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
7.89M |
2.54% |
23.71% |
| Gross Profit |
1.85M |
36.76% |
71.52% |
| Operating Income |
-700.00K |
9.72% |
23.41% |
| Net Income |
-847.00K |
-11.93% |
-17.31% |
| EPS |
-0.11 |
8.33% |
0.00% |
Key Financial Ratios
operatingProfitMargin
-8.87%
operatingCashFlowPerShare
$-0.28
freeCashFlowPerShare
$-0.36
Management Commentary
Store Openings & Franchise Growth: CEO Jeff Geygan stated, "We have concentrated on improving our liquidity, revitalizing our franchise network, and executing key operational priorities... We see a return to growth in franchise stores for the first time in over a decade."
Operational Efficiency: Discussing the new ERP system launch, Geygan noted, "We anticipate improved cost management and enhanced strategic decision-making driven by near-real-time insights."
Market Demand Fulfillment: Geygan reiterated performance amidst high demand, saying, "We fulfilled nearly 100% of franchisee and specialty market demand, an important accomplishment and significant improvement from last year."
Jeff Geygan: "We're well positioned to execute our long-term vision for the company, driven by the right people sitting in the right seats."
â Jeff Geygan
Carrie Cass: "Net loss for the quarter was $0.8 million or negative $0.10 per share... We anticipate improved results in the quarters ahead."
â Carrie Cass
Forward Guidance
Looking forward, management remains optimistic about revenue growth due to new store openings and enhanced e-commerce strategies, with expectations of substantial improvements in digital assets and customer engagement. The goal is to leverage the new ERP system for efficient operations and cost management while focusing on strategic acquisitions and driving higher average unit volumes (AUV) within their franchise network. Key factors for investors to watch include the rollout of the new ERP system and holiday sales performance, which underscore the operational resilience of RMCF.