Premium chocolate manufacturer and retail franchisor Rocky Mountain Chocolate Factory has reported a 3% increase in revenues for the second quarter to US$6.8m, but net earnings fell by 7.5% to $1.04m.

The company said its operating results for the most recent quarter were negatively impacted by the shifting of a large non-retail product shipment from the second quarter last year into the third quarter of the 2007 fiscal year. Rocky Mountain said it also incurred higher non-cash stock compensation, legal and accounting, and store closing expenses than in the corresponding quarter last year.

The company said that very hot weather had also affected sales. Same-store sales at franchised retail outlets fell by 1.1%, the company reported, while same-store pounds of products purchased from the company's factory by franchisees were 7.3% down.

"The hottest summer in 70 years negatively impacted sales at Rocky Mountain Chocolate Factory stores in many parts of the US, including such key markets as California, Washington and Oregon, and this caused our royalty and marketing revenues and confection sales to franchisees to trail expectations during the second quarter," said chief operating officer and chief financial officer Bryan Merryman. "With the return of more normal weather patterns, retail store sales have strengthened since mid-August, and this has also been apparent in orders from franchisees for factory-produced chocolates and other confection products."

For the first half, revenues rose by 13.4% to approximately $13.5m, with net earnings up by 5% to $1.97m.