Rocky Mountain Chocolate Factory (RMCF)
NASDAQ:RMCF
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Rocky Mountain Chocolate Factory
(NASDAQ:RMCF)
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Rating:45Neutral
Price Target:
$2.00
▲(32.45% Upside)
Action:Reiterated
Date:06/02/26
The score is held down primarily by weak financial performance (persistent losses and negative operating/free cash flow) and bearish technicals (price below key moving averages with negative MACD). The earnings call adds some offset via concrete turnaround actions and cost/margin progress, while valuation provides limited support because the company is unprofitable and no dividend yield is available.
Positive Factors
Franchise development pipeline
A committed 40-store development pipeline and focus on multi-unit franchisees provide a structural growth runway that leverages franchising capital. Over 2-5 years this can expand royalty streams and diversify retail geography with limited corporate capex, improving recurring revenue mix if execution holds.
Negative Factors
Persistent negative cash flow
Multi-year negative operating and free cash flow indicates the core business is consuming cash rather than self-funding. This structural cash burn raises reliance on external financing, limits reinvestment capacity, and elevates risk if revenue recovery or franchise rollouts are slower than planned.
Read all positive and negative factors
Positive Factors
Negative Factors
Franchise development pipeline
A committed 40-store development pipeline and focus on multi-unit franchisees provide a structural growth runway that leverages franchising capital. Over 2-5 years this can expand royalty streams and diversify retail geography with limited corporate capex, improving recurring revenue mix if execution holds.
Read all positive factors
Rocky Mountain Chocolate Factory (RMCF) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$16.26M
Dividend YieldN/A
Average Volume (3M)79.13K
Price to Earnings (P/E)―
Beta (1Y)0.55
Revenue Growth-7.04%
EPS Growth34.25%
CountryUS
Employees135
SectorConsumer Defensive
Sector Strength42
IndustryFood Confectioners
Share Statistics
EPS (TTM)-0.56
Shares Outstanding9,398,826
10 Day Avg. Volume50,417
30 Day Avg. Volume79,134
Financial Highlights & Ratios
PEG Ratio0.13
Price to Book (P/B)3.94
Price to Sales (P/S)0.75
P/FCF Ratio-8.67
Enterprise Value/Market Cap1.47
Enterprise Value/Revenue0.87
Enterprise Value/Gross Profit4.68
Enterprise Value/Ebitda-9.50
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Rocky Mountain Chocolate Factory Business Overview & Revenue Model
Company Description
Rocky Mountain Chocolate Factory (RMCF) is a premier manufacturer and retailer of gourmet chocolates and confections, founded in 1981 in Durango, Colorado. The company specializes in handcrafted chocolates, fudge, and a variety of other sweet trea...
How the Company Makes Money
RMCF primarily makes money by monetizing its branded confectionery business through a combination of direct retail sales (where it operates company-owned locations) and franchising (where independent franchisees operate stores under the Rocky Moun...
Rocky Mountain Chocolate Factory Earnings Call Summary
Earnings Call Date:Jun 01, 2026
(Q4-2026)
| % Change Since: |
Next Earnings Date:Jul 09, 2026
Earnings Call Sentiment Neutral
The call highlights meaningful operational progress: margin mix improvement, cost reductions, promising store remodel results, a healthy pipeline of 40 committed franchise developments, and planned ecommerce and packaging fixes. However, these positives are offset in the near term by a significant revenue decline (~24% total revenue, ~28% product sales), a widened net loss ($3.4M), a $1.5M packaged sales shortfall, and several one-time disruption costs. Management presented concrete remediation steps (consumer research, reconfigured packaging by Labor Day, negotiated shipping rates, POS analytics, and focused franchise growth) that support a path to recovery, but near-term financial weakness and execution risk remain material.Positive Updates
Operational Margin Improvement
Company achieved the highest gross margin mix in over 2 years and management says gross margin is now close to long-term target due to price adjustments, production process reviews, SKU rationalization and improved production throughput.
Negative Updates
Significant Revenue Decline
Total revenue for the quarter was $6.8M versus $8.9M a year ago, a decline of approximately 24%; product sales were $5.1M vs $7.1M, a drop of ~28% year-over-year.
Read all updates
Q4-2026 Updates
Positive
Negative
Operational Margin Improvement
Company achieved the highest gross margin mix in over 2 years and management says gross margin is now close to long-term target due to price adjustments, production process reviews, SKU rationalization and improved production throughput.
Read all positive updates
Company Guidance
Management's guidance focused on rapid remediation of the packaged product setback and targeted growth initiatives: a reconfigured packaged lineup (3‑, 4‑ and 6‑piece assortments, cup‑style packaging) will be in stores by Labor Day after consumer research of more than 1,000 participants to address roughly $1.5M of package sales shortfall (and the nearly $1.5M seasonal specialty‑customer exit), the new mobile app is expected late summer, and a Miraculous caramel‑apple promotion runs Sept 15–Oct 31; ecommerce shipping economics have been improved via corporate rates, third‑party delivery is generating ~2x average baskets versus in‑store with ~50% fulfilled as in‑store pickup and commissions at or below 20%, and a white‑label online option avoids commissions; retail/rollout targets include dedicating 60% of selling space to core brand items, growing company‑owned stores from 4 (3% of the base) toward 5–10%, pursuing 40 committed ADA locations over the next 3–5 years (including a new 6‑store ADA and a 9‑store Miami ADA with 2 underway), aiming for ~6‑month store openings and multi‑unit franchisees (10–12+ units); remodel proof points: Chicago ~ $1.1M and Charleston ~ $600K annualized run rates and Corpus Christi +10–15% sales post‑remodel; Q4 financial context: total revenue $6.8M, product sales $5.1M, net loss $3.4M, cash $1.2M, inventory $4.1M, and total debt $6.6M.Rocky Mountain Chocolate Factory Financial Statement Overview
Summary
Income Statement
22
Negative
Balance Sheet
55
Neutral
Cash Flow
28
Negative
| Breakdown | Feb 2026 | May 2025 | Feb 2024 | Feb 2023 | Feb 2022 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 27.50M | 29.58M | 27.95M | 30.43M | 29.49M |
| Gross Profit | 2.80M | 3.25M | 4.71M | 8.15M | 8.96M |
| EBITDA | -2.18M | -4.72M | -3.94M | -4.10M | 223.65K |
| Net Income | -4.56M | -6.12M | -4.17M | -5.68M | -341.70K |
Balance Sheet | |||||
| Total Assets | 20.21M | 21.18M | 20.58M | 21.99M | 26.88M |
| Cash, Cash Equivalents and Short-Term Investments | 1.22M | 720.00K | 2.08M | 4.72M | 7.59M |
| Total Debt | 7.90M | 7.21M | 2.94M | 2.39M | 1.81M |
| Total Liabilities | 14.98M | 14.20M | 9.94M | 7.62M | 7.48M |
| Stockholders Equity | 5.23M | 6.97M | 10.64M | 14.37M | 19.40M |
Cash Flow | |||||
| Free Cash Flow | -2.38M | -10.36M | -5.45M | -3.10M | 1.92M |
| Operating Cash Flow | -1.81M | -6.59M | -2.44M | -2.10M | 2.86M |
| Investing Cash Flow | -764.00K | -1.66M | -1.45M | -767.82K | -605.00K |
| Financing Cash Flow | 3.07M | 6.89M | 1.25M | 0.00 | -299.06K |
Rocky Mountain Chocolate Factory Technical Analysis
Negative
1.51
Price Trends
2.23
Negative
2.31
Negative
1.98
Negative
Market Momentum
-0.15
Positive
28.46
Positive
4.30
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RMCF, the sentiment is Negative. The current price of 1.51 is below the 20-day moving average (MA) of 2.12, below the 50-day MA of 2.23, and below the 200-day MA of 1.98, indicating a bearish trend. The MACD of -0.15 indicates Positive momentum. The RSI at 28.46 is Positive, neither overbought nor oversold. The STOCH value of 4.30 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for RMCF.
Rocky Mountain Chocolate Factory Risk Analysis
Rocky Mountain Chocolate Factory disclosed 32 risk factors in its most recent earnings report. Rocky Mountain Chocolate Factory reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Rocky Mountain Chocolate Factory Peers Comparison
UnderperformOutperform
Sector (62)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
68 Neutral | $37.16B | 33.18 | 23.72% | 3.00% | 11.50% | -33.67% | |
67 Neutral | $2.87B | 28.67 | 10.77% | 0.95% | 2.38% | 12.62% | |
64 Neutral | $78.70B | 30.13 | 10.04% | 3.53% | 7.79% | -25.10% | |
62 Neutral | $20.33B | 14.63 | -3.31% | 3.23% | 1.93% | -12.26% | |
52 Neutral | $568.92M | -1.10 | -76.98% | 3.34% | -5.22% | -2258.17% | |
45 Neutral | $16.26M | -3.09 | -56.79% | ― | -7.04% | 34.25% |
* Consumer Defensive Sector Average
RMCF
Rocky Mountain Chocolate Factory
1.72
0.54
45.76%
HSY
The Hershey Company
182.71
25.66
16.34%
TR
Tootsie Roll
38.07
4.75
14.25%
MDLZ
Mondelez International
60.99
-3.03
-4.73%
DNUT
Krispy Kreme
3.27
0.35
11.99%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.