Rocky Mountain Chocolate Factory, Inc. reported a decline in total revenue for the three months ended August 31, 2024, amounting to $6.38 million, down 2.7% from $6.56 million in the same period of 2023. For the six months ended August 31, 2024, total revenue was $12.79 million, a decrease of 1.6% from $12.99 million in the prior year. The decrease in revenue was primarily attributed to reduced franchisee demand and a price increase implemented in June 2024, which impacted Durango product and retail sales.
Total costs and expenses for the three months ended August 31, 2024, were $7.29 million, a decrease of 3.6% from $7.57 million in the same period in 2023. The company reported a loss from operations of $914,000 for the three months ended August 31, 2024, an improvement from a loss of $1.01 million in the same period of the previous year. The net loss for the same quarter was $722,000, compared to a net loss of $999,000 in 2023. For the six months ended August 31, 2024, the net loss increased to $2.38 million from $1.82 million in the prior year.
The company’s gross margin for the three months ended August 31, 2024, improved to 11.5%, up from 7.7% in the same period of 2023, attributed to increased selling prices and operational efficiencies. However, the gross margin for the six months ended August 31, 2024, decreased significantly to 2.6% from 6.4% in the previous year, primarily due to rising raw material and labor costs.
As of August 31, 2024, Rocky Mountain Chocolate Factory had total assets of $21.13 million, an increase from $20.58 million as of February 29, 2024. Current assets rose to $10.99 million, driven by an increase in inventories, which reached $6.12 million, up from $4.36 million. The company’s current ratio was reported at 1.24:1, below the required 1.5:1 under its credit agreement.
In terms of strategic developments, the company entered into a new credit agreement on September 30, 2024, for $6 million, maturing in 2027, with an interest rate of 12% per annum. Additionally, on August 5, 2024, Rocky Mountain Chocolate Factory issued 1.25 million shares of common stock at $1.75 per share, raising approximately $2.2 million for working capital and general corporate purposes. The company is also focusing on reducing overhead costs and improving manufacturing efficiencies in the coming year.
About Rocky Mountain Chocolate Factory, Inc.
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