Rocky Mountain Chocolate Factory (RMCF) 15 Oct 242025 Q2 Earnings call transcript

Good evening, ladies and gentlemen. Thank you for standing by. Welcome to today's conference call to discuss Rocky Mountain Chocolate Factory's financial results for the fiscal second quarter 2025. [Operator Instructions] As a reminder, this conference is being recorded.

Joining us on the call today is the company's interim CEO, Jeff Geygan and CFO, Carrie Cass. conference under contain Reform the XXXX. this considered that Act advised statements forward-looking Private be call statements will are of Please Securities Litigation

forward-looking SEC. the are these cause with do to filings as forward-looking and actual company's law, the and to in differ also undertakes obligation these call. certain which as time These undue subject the place those the as statements, These results subject of this no uncertainties reflected any forward-looking on from described statements. and are by in to being well can risks Please reliance as of risks to not only from required statements. that uncertainties publicly Except company known that assumptions materially revise are statements forward-looking the other time update unknown forward-looking are to date made statements or

non-GAAP supplemental measures of including also measures presentation measures, adjusted SEC financial in company's reconciled accordance been have business. as EBITDA directly the the with to includes comparable The most GAAP performance of All certain rules. measures non-GAAP

this You EDGAR release its Form available website furnished within will information the other and has of website available Investor are to call which earlier after and page, ended. company's approximately on and on SEC be today, the on section X-K, will earnings the the find currently tables XX company's Relations in reconciliation press important SEC's hours the

to company's Jeff, go please now I to Geygan. Jeff And interim ahead. CEO, call like the the would turn over

Thank you, evening. and good

in strides executing made multiyear our plan. we quarter, strategic This

and company's and sustainable we'll details organization. and a about progress several strong the focused team solid foundation critical initiatives updates last Today, additional sharing our on liquidity, As laying I mentioned been we've profitability. providing these executive on areas: a the across on rebuilding be for growth strengthening call,

new with store openings. begin Let's

opening in last month our Edmond, strategic various store mentioned first markets Oklahoma. new targeting quarter, with we beginning next new As we're stores across

In of to agreements X finalizing the process we for and soon. expect in announce another lease which addition, we're franchise locations,

We expansion XXX communities commitment pipeline In been vein, by Rocky scaling share bringing Franchise XXXX additional has the Factory have we're more to and United Franchise sites our and the for the the underscore the Times. States. that operators. business Mountain These a this experience to across of Mountain pleased Chocolate included growing qualified Rocky to in Chocolate efforts Factory

premium our franchisees. This attractiveness recognition our chocolate a the reinforces for leader the and model position of as highlights in category

we're completion Turning of to our that nearing company plus us. with the report process XX% now rebrand. to behind I'm able

to of before expect team We end the enables design the store experience also interest new for with rebrand finalize drive store as and further We're us work unveiling the our new forward sales is the for new targeting our major design launch step very to the to franchise it customers. branding. RMCF year mockups of and our elevate in-store our This soon. a redefine look to and brand our

franchisee. holiday managing we're of meet RMCF to demands carefully the inventory With the approaching, each quickly our season

prioritizing need on to product franchisee the sales to has to our ensure fulfillment they important is focus this network Our season. during peak maximize every

improved order our profitability. franchisees the growth to sales central with company. increase provide closely experience across and of continuing They're our stores working Our fulfillment and lifeblood improve to franchisees helping improve network to are We're our the our to strategy. an rates

ideas developing Rocky and industry, group trends our composed and product with of franchisees or of specifically franchisees FIG, sharing our customers. work most creative on the focused network our example Mountains Innovation of the is team formed One for improved and together the and innovative a the product who innovative all across new a of development product Product Franchisee handful recently Group, collaboration

incorporate to the a sharing source in forward the product these of ideas. of We innovations updates new team as early inspiration for and this future. a look and product in flavors, go packaging introducing creating our variety process it's live development valuable the product group Although a to is network, new of colors

several On changes. the personnel front, we've key implemented strategic

area the factory. starts wages the our to equally consistently important within which talent detrimental with During the our factory vitally and attract employee with we've helped to at to at production our capital we for with best hourly high factory we hiring will utilization employed operations resources system. And our contended the increase remain quarter, training our to we Durango workers, working and the and them have employees change after Historically, was need talent we on This increased stops run downtime. over The necessary immediately spend retain constant both turnover human ROI in minimal investment important, help We to the levels. training factory. ensure ensure at and time want daily to incentivize time.

Carrie track an of we discipline. welcome our August. leadership. growth our initiatives, advancing and She's corporate our and She continued in to important in of deep well as role record to Cass, control in a efforts the improved level, the as CFO positioned excited strong At strategy operational brings reinforcing were managing finance principles experience our cost new business play

initiatives. Steve strategic credit to Board million enabled $X this the retire to machinery, a our plan. group and previous a Earlier additional company's by earlier, executing month, investment As led our announced one credit This X-year has liquidity essential capital improving position our of $X multiyear facility facility been equipment, while new us providing for million in facility of we strategic with investors our I Craig. mentioned growth members inventory,

will toward all our early ERP condition decision-making. dramatically new operational approach scheduling, data development logistics, support. actionable accelerated and that decision-making key with focused system up The and XXXX, will our business integration more allow for capabilities gearing reporting into intelligent initiative our deploy efficiencies a system is This business This eye visibility manual process greater will new enhancing errors we're to functions and also minimizing boosting inventory procurement, improve departments, an finance, needed real-time and to organization. much as With integrate and franchise integration streamlining production to provide a growth operations, strategic for on such data. across processes management, throughout

changing dynamics. So quickly adapt can more market to we

for other include Two initiatives loyalty small of store of just loyalty fiscal the total ensure working during We're future. the program in XX active more this our We're to and forward to rollout a implementation updates strategy. consistent key and good phase our in network. network. 'XX across business sharing progress e-commerce RMCF's making look fraction with smooth Today, the closely a and consultants stores, a customer is program transitional

business, an up channel to store. our Our an is of sales an unit plan. e-commerce team growth sales driver revenue of company-owned important our We've independent e-commerce a similar set as

traffic. the revenue traffic We're the All create early store of to drive designed initiative, details know, complete physical for the increasing to intent with share be in plan to e-commerce important to and our We're locations. e-commerce our laying business brick-and-mortar this about large still presence a to that contributor foundation but store-level an to complement e-commerce growth locations. our managing It's and profitability website seamlessly will with from should integrate we our future. expect you

as occurring and to the company momentum by starting shareholders. forward brand personnel visible from and We're within improvement to see all our our store and focused for franchisees encouraged making We're of that lead execute both value we're new sound and to develop long-term long-term across network continue intensely improvements. our business of today we across our creating will on strategy. decisions enhancements openings path to increased the summary, operational In and

said, to over results. to financial I'll walk through that turn With our Carrie CFO, fiscal now it you QX Cass,

Mountain and growth work talented Thank and team as this focus Jeff. on our alongside you, delivering Chocolate thrilled we join I'm to driving to value to shareholders. Factory Rocky

retail a XX.X% increase otherwise product gross compared on was Moving $X.X year and QX $X.X $X.X $X.X operating million profit $X.X with price the results, to efficiencies. year-over-year and sales fees was revenue improving unless The XXXX $X comparisons our The all million last basis. compared revenue to quarter period fiscal and million primarily million $X.X franchise compared stated, for to were were and in at the in increases compared essentially and million royalty margin profit year. improved gross was Product to on Total flat attributed to to same to last total X.X%. gross million. million are

share Total in fiscal a X from compared expenses of to million per improved compared a year with ago. $X.X of per or the quarter quarter -- cost XXXX. for $X.XX and in loss to million million share $X $X.X $X.XX or the loss was $X.X Net million

to February of $X.XX second ended Turning balance with XX, fiscal XXXX. to million sheet. quarter We $X the at million compared a cash balance the

strategic which are positioned factory inventories of total February the also at to of holiday buildup fiscal million the our inventory important XXXX, the well meet million We with of our at we ensure XX, season. $X.X quarter needs franchisees ended during $X.X the compared reflects to to

XX, October our XXXX, February on line $X.X at remained million line outstanding on million $X.X credit long-term of credit we compares debt. This had free of of our and XX, outstanding As to of XXXX.

a line of mentioned million has quarter our credit subsequent we to Jeff previous entered which into facility credit. earlier, enabled end, $X to us As the retire

this This you concludes any you. to back at Lisa, our questions prepared glad to time. be have remarks. We'll answer

company's like queue. to no Adviser, Relations call turn [Operator Sean time, please ahead. Investor there to questions I Instructions] the go are over At the this the would Mansouri, in

Thank you, Lisa.

here, to come past e-mail While week. questions we're Q&A to waiting build over that would for address like in we via some a live have the up

efficiency employee wages have Carrie, operational factory Jeff, off, seen improvements things kicking increasing any at since in measurable So the you level?

is recently but is as been you. that tell little just it level had implemented higher bit a what than Sean, retention the Jeff. say of to I this this, Thank historically. dramatically can early It's we've

run report on timely improvement. of production So to lines my essential And to encouraged us work is our very earlier, by we're employees our that allow that comments our to basis that having adding -- production achieving all to well-trained goals. from a

the expect and actually early how design of from franchisee to Excellent. rebranding process store feedback call, any rebranding the interest. share came Can you the brand you new complete, to customer during this X And and XX% XX% engagement with affect in efforts? do the

Well, spent of lot amount in of want the and cat bag. great the I an a effort. taken awful of let We It's initiative. this don't time out money to

shortly. out that rolling be will We

with. will who everyone be what with it has internally the reacted we've very excited has looked up come at know think I I team favorably.

Great.

across And you overall store How you these markets? new openings foresee X targeting new selecting revenue do openings impacting strategic prioritize in you fiscal 'XX? How are growth locations? mentioned markets. what store do factors when specific these You considering

question. good Yes,

first. right operator. to the proper identify time add me takes the it part site, Let latter the identify to

operators franchisees. Some of existing those are

and up So to actually running. store it time a we know takes get them well. -- But then put a

as far e-commerce, from impact increasing as which growth sales XX, a significant stores. wouldn't States. in well as stores, revenue across as The quickly. I XXX on XX we -- existing fiscal the which The states 'XX, of So February is see brand-new the amount be growth for on have can turned very stores revenue ends really United from opportunity

logistics, in and we which they excellent are pins, means the One great. pins challenges going we product to between can we A location of best X from where that I've located, the map site you on something basis. timely to is if are store the be all are if the said truck is actually that have already I have to an stores put to And a is department, our new stores going group. would a these look getting be site at that because where face between development B, our

about stores of of In our the things, XX% Mississippi. west are the scheme of

us the Northeast. for of more already we where Mississippi somewhat east territory Midwest, in virgin but little really there's in presence so in have very the Southeast, a So the the

opportunity. So could terms of where in obvious identify you

and Boston, to think then us. are start There's down come for which areas dense D.C. You to obviously Philly, you New Atlanta, population. York, key

good. from feedback out the there the few stores All is very have that we

eye keen right there's areas specifically. great heads opportunity operators. Conklin, developing we for locations those Kara development who in team franchise has think our on But right a the the with us So

the encouraged and locations we're of by pipeline developing. very that So operators we prospective have

Thanks, That the you. we received concludes Q&A via Operator, Jeff. e-mail. back to

for all call. you Thank today's you. in Thank participating

hang And have may lines up your a day. phone You now. wonderful everybody,