When a listed company, in this case Rocky Mountain Chocolate Factory (nasdaq:RMCF), reports that their quarterly retail sales are just $188,000 (for the entire quarter) you know something is really wrong with their business model.
Yes, it is a Coronavirus crisis, yes it is a rough period for retail and yes they are selling chocolates, but $188K?
In the SEC filing submitted on Monday Rocky Mountain Chocolate Factory issued a press release with their Q2 numbers, and they are not good.
Retail sales decreased to $188,000 in the three months ended May 31, 2020
Royalty and marketing fees decreased 82.5 percent to $325,000
Franchise fees decreased 48.3 percent to $55,000
Operating income decreased from $946,000 in the three months ended May 31, 2019 to an operating loss of $(4.8) million during the three months ended May 31, 2020.
Net income decreased from $712,000, or $0.12 per basic share and $0.11 per diluted share in the three months ended May 31, 2019 to a net loss of $3.7 million, or $(0.61) per basic and diluted share in the three months ended May 31, 2020.
Adjusted EBITDA (a non-GAAP measure defined later in this release) decreased from $1.8 million in the three months ended May 31, 2019 to a loss of $(4.0) million in the three months ended May 31, 2020.
So, everything decreased heavily and these sales numbers seems as if we are looking in some local hardware store monthly numbers rather than NASDAQ listed company.
With today losses RMCF stock lost more than 50% of its value in 2020. I am wondering if this is where the stock will bottom out or is RMCF just one quarter away from going towards the point of no return.