Rocky Mountain Chocolate Factory Reports Fiscal Q2 Loss, Completes Durango Sale-Leaseback
DURANGO, Colo., October 19, 2026: Rocky Mountain Chocolate Factory, Inc. (Nasdaq: RMCF) reported a net loss of $1.3 million for its second quarter of fiscal 2027, which ended August 31, 2026. The company simultaneously disclosed the completion of a $6.6 million sale-leaseback transaction for its manufacturing facility in Durango, Colorado, and the initiation of a strategic review by its Board of Directors.
DURANGO, Colo., October 19, 2026: Rocky Mountain Chocolate Factory, Inc. (Nasdaq: RMCF) reported a net loss of $1.3 million for its second quarter of fiscal 2027, which ended August 31, 2026. The company simultaneously disclosed the completion of a $6.6 million sale-leaseback transaction for its manufacturing facility in Durango, Colorado, and the initiation of a strategic review by its Board of Directors.
Total revenue for the quarter was $6.7 million, a decrease from $6.8 million in the second quarter of fiscal 2026. The decline was primarily driven by lower Durango product sales and reduced royalty and marketing fees, which offset an increase in retail sales resulting from a larger company-owned store base and price increases. Gross margin improved to 8.0% from (0.6)% in the prior year period, as total product and retail gross profit rose to $0.4 million from a gross loss of less than $0.1 million.
Total costs and expenses increased to $7.7 million from $7.3 million in the same quarter last year. This rise reflected higher franchise and general and administrative costs associated with the expanded store base, partially offset by lower cost of sales and sales and marketing expenses. The net loss widened to $1.3 million, or $(0.14) per share, compared to a net loss of $0.7 million, or $(0.09) per share, in the prior year period. EBITDA loss increased to $0.7 million from $0.1 million in the previous fiscal second quarter.
Allen Harper, Interim CEO, stated that the leadership team has aligned around shared priorities to build a stronger organization. David Denker, Chief Operating Officer, noted that August marked the company's highest production and shipping month of the calendar year. He cited enhancements to the reporting platform and ERP capabilities as factors providing greater visibility into demand and inventory, contributing to the recovery in gross margin.
The company expanded its company-owned store base to five locations following the acquisition of Chino Hills in July 2026. New franchised stores also opened in Folsom, California, and Tinton Falls, New Jersey. The company operates approximately 250 locations across the United States and internationally.
The Board of Directors formed a strategic committee during the quarter to explore strategic alternatives with the assistance of advisors. These alternatives may include a possible sale, merger, or other business combination, or a going-private transaction. The company has received expressions of interest from third parties, though there is no assurance that the review will result in a transaction.
Subsequent to the quarter-end, Rocky Mountain Chocolate Factory completed a sale-leaseback transaction with American Heritage Legacies, LLC on October 16, 2026. Net proceeds from the sale were used to repay $6.6 million in debt that bore interest at 12% per annum. The repayment incurred prepayment penalties and related costs of $0.3 million.
On the same date, the company entered into a loan agreement with Alpine Bank for an advance of $2.0 million for working capital purposes. This loan matures on October 16, 2028, and bears interest at the prime rate plus 1%. The company will host a conference call on Monday, October 19, 2026, at 5:00 p.m. ET to discuss these results.