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Chocolatier sees retail improvement
Herald Staff Writer
A Rocky Mountain Chocolate Factory executive expressed optimism that retailing may have turned a corner after the company reported only a slight decline in revenue.
The Durango chocolatier’s revenue declined 3.2 percent to $6.1 million during the company’s second quarter that ended Aug. 31, down from $6.3 million during the same period last year.
Same-store sales, a key measure of retail health, slid
4.8 percent.
“While our franchisees continue to wrestle with a weak economy and lower customer traffic in most of our retail venues, the 4.8 percent decline in same-store sales at our franchised locations was not as great as in either of the previous two quarters,” said Bryan Merryman, chief operating officer, in a news release Tuesday.
“This supports our cautious optimism that the U.S. retailing environment may have bottomed out,” he said.
Franchisees still face a tight credit market that has curtailed their access to financing for new store openings, he said.
Net income for the June-August period rose 5.9 percent, from $833,000 a year ago to $882,000. Merryman said the earnings increase was the result of lower general and administrative costs.
“We are pleased to report
a modest increase in our second-quarter earnings,” Merryman said.
One bright spot for Rocky Mountain Chocolate Factory continues to be its shared stores with ice cream retailer Cold Stone Creamery.
Nine co-branded test stores have opened or been converted to offer both Rocky Mountain Chocolate and Cold Stone products.
“We continue to be pleased with the sales performance of these locations,” Merryman said.
Rocky Mountain signed an agreement with Kahala Franchise Corp.-owned Cold Stone in August. Merryman said the co-branding concept will be expanded.
Franchisees and licensees opened 10 new stores, including four Cold Stone co-branded stores, during the recent quarter. They opened in Silverthorne, Aberdeen, N.C.; Arlington, Texas; Asheville, N.C.; Coconut Creek, Fla.; Mammoth, Calif.; Peoria, Ariz.; Rocky View, Alberta; Santa Rosa, Calif., and Thornhill, Ontario.
The company said it expected 30 to 40 stores to open this year, including 10 to 20 stores with Cold Stone.
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