2023-05-24 12:30:53 ET
Rocky Mountain Chocolate Factory ( NASDAQ: RMCF ) shares fell sharply during Wednesday’s trading after highlighting accelerating losses in its fiscal fourth quarter
The company reported a $0.29 per share loss in the quarter, accelerating from a $0.03 per share loss in Q3 and $0.06 in earnings per share in Q4 2022. The larger losses came despite a 4.6% rise in revenue year over year to $8.15M.
CEO Rob Sarlls indicated that the company is in the midst of rolling out a “strategic transformation plan” to return to profitability. Sarlls highlighted the company’s exit from the yogurt business and inventory trimming as key cost saving efforts pursued thus far. Inventory levels were cited as being at the lowest point in a decade.
“The plan is designed to streamline end-to-end operations and exit non-core businesses, revitalize the in-store experience, revamp and expand our digital presence and elevate the Rocky Mountain Chocolate Factory brand,” he said. “The three-part plan will be executed over the next 3-5 years, establishing Rocky Mountain Chocolate as America’s preferred premium chocolatier with first-class manufacturing and omni-channel retail.”
For the full fiscal year 2023, total factory and retail gross profit was $4M as compared to $4.9M in 2022 as gross margins contracted 450 basis points amid “lower production volumes, expenses associated with obsolete inventory and higher costs of raw materials.” Net losses for the full year accelerated to $5.5M in fiscal 2023 from just $500,000 in 2022.
Shares of Rocky Mountain Chocolate Factory ( RMCF ) fell 5.82% in afternoon trading on Wednesday.
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Rocky Mountain Chocolate stock reels on earnings disappointment