Rocky Mountain Chocolate Factory (RMCF) Q3 2026 earnings summary

Executive summary

• Margin-first transformation prioritized profitability, leading to improved gross profit and margin despite a modest year-over-year revenue decline from $7.9 million to $7.5 million, mainly due to exit from lower-margin streams and non-renewal of unprofitable contracts.

• Net loss for the quarter narrowed to $0.2 million ($0.02 per share) from $0.8 million ($0.11 per share) year-over-year, with EBITDA improving to $0.4 million from negative $0.4 million.

• Franchise development pipeline strengthened, with two new stores under construction and 34 under area development agreements, supported by enhanced digital marketing and technology initiatives.

• $2.7 million equity capital raised post-quarter, used to reduce leverage, pay down debt, and add working capital.

• Over 120 franchise stores now live on a new POS platform, with operational and technology improvements advancing system-wide execution.

Financial highlights

• Q3 2026 revenue was $7.5 million, down from $7.9 million year-over-year, with gross profit rising to $1.4 million from $0.7 million and gross margin improving to 21.4% from 10% year-over-year.

• Net loss narrowed to $0.2 million (negative $0.02 per share) from $0.8 million (negative $0.11 per share) year-over-year.

• EBITDA improved to $0.4 million from negative $0.4 million year-over-year, and total costs and expenses reduced to $7.5 million from $8.6 million.

• Cash and cash equivalents at November 30, 2025, were $0.6 million, with working capital of $3.6 million.

• For the nine months ended November 30, 2025, revenue was $20.7 million, up 0.3% year-over-year, with net loss narrowing to $1.1 million from $3.2 million.

Outlook and guidance

• Margin expansion expected as benefits from lower input costs, including cocoa tariff elimination and favorable price locks, are realized.

• Franchise development to drive long-term growth, with 34 new stores planned over the next three to five years and new store openings paced per agreement.

• Focus remains on increasing same-store sales and e-commerce, with no dramatic revenue growth expected in 2026 from new stores.

• Management expects continued inflationary pressures on raw materials, labor, and freight, though some moderation has been observed.

• Enhanced digital marketing and technology integration anticipated to strengthen execution and growth.