Rocky Mountain (RMCF) Q1 Earnings and Revenues Decline Y/Y

Core Viewpoint - Rocky Mountain Chocolate Factory, Inc. reported a wider loss per share of 26 cents in Q1 fiscal 2025 compared to a loss of 13 cents per share in the same quarter last year [1] Revenue Summary - Total revenues for the first quarter were $6.4 million, reflecting a decrease of 0.5% year over year [2] - Revenue sources include Durango product and retail sales, Franchise fees, and Royalty and marketing fees [5] - Durango product and retail sales generated $5.3 million, an increase of 5.2% year over year due to improved franchisee demand and inventory management [5] - Franchise fees totaled $0.1 million, up 55.6% year over year, attributed to store ownership transfer fees [6] - Royalty and marketing fees generated $1.1 million, down 23.1% year over year due to a decrease in the number of stores subject to royalty fees [6] Gross Margin Analysis - Gross margin decreased to (5.8)% from 5.1% in the year-ago quarter, primarily due to increased raw material and labor costs [7] Operating Expenses - Sales and marketing expenses decreased by 9.1% year over year to $0.4 million, driven by operational efficiencies and cost-cutting measures [8] - General and administrative expenses decreased by 35.9% year over year to $1.2 million, mainly due to a reduction in legal fees from the previous year [8] Profitability Metrics - The net loss for the first quarter was $1.7 million, wider than the net loss of $0.8 million in the same quarter last year [9] - Loss from operations totaled $1.6 million, compared to a loss of $1.5 million in the year-ago quarter [14] Liquidity and Debt Management - The company ended the first quarter with cash and cash equivalents of $0.6 million, down from $2.1 million at the end of fiscal 2024 [10] - Net cash used in operating activities of continuing operations was $2.2 million, compared to $0.4 million a year ago [10]