News

Pie Five struggles as Pizza Inn posts solid Q3

May 8, 2019

Rave Restaurant Group Inc. reported a mixed bag of Q3 financial results for its two brands, Pie Five and Pizza Inn. Although combined, company revenue increased by $0.4 million to $3.1 million in the third quarter ending March 24, Pie Five saw a 4.4% drop in its comparable store retail sales. Pizza Inn, however, saw a 3.3% increase in comparable store retail sales, and a 4.3% lift in domestic retail sales, helping Rave to finish the quarter in the black with total comparable store domestic retail sales up 1.1%.

"Our third quarter results are another indication of progress for Rave," CEO Scott Crane said in a company press release. "This quarter, we continued the trend of positive same store sales and also made key investments in international operations and development resources that should accelerate the growth for Pizza Inn, Pie Five, and PIE — both domestically and internationally — in the coming quarters."

Other Q3 highlights

• Rave Recorded a net loss of $0.3 million for the third quarter of fiscal 2019 compared to a net loss of $0.5 million for the same period of the prior year.
• Rave had a net loss of $0.02 per share for the third quarter of fiscal 2019 compared to a net loss of $0.03 per share for the same period of the prior year.
• Pizza Inn domestic unit count including finished at 156, which includes its 2018 launch of PIE, an express format of Pizza Inn.
• Pizza Inn international unit count finished at 48.
• Pie Five domestic unit count finished at 61.

"We continue to believe that positive trends in RAVE total comparable store domestic retail sales and Adjusted EBITDA point to a strong future for RAVE," said Crane. "In the last two years, we've shored up the balance sheet, improved our cash position and begun generating positive cash flow from operations. Investments in development resources, updated technologies, and improving the restaurant experience for our guests give us confidence that this will continue into the future."

Year to date, Pizza Inn total domestic and comparable store retail sales increased by 2.2% and 2.8%, respectively, compared to the same period of the prior year.

"After nine consecutive quarters of growth in comparable store retail sales, we feel confident that Pizza Inn is on the right track," Crane said. "Initiatives like all-day buffet, online ordering, revamping our rewards program and remodeling existing locations continue to drive our sales growth. We're proud of the efforts of our team to create a Pizza Inn experience that is appealing to the next generation of guests."

The year-to-date info wasn't as good for Pie Five, which posted that total domestic and comparable store retail sales dropped 11.8% and 3.2%, respectively, compared to the same period of the prior year.

"Pie Five comparable store sales in the quarter were heavily impacted by temporary closures and extreme winter weather in our northern markets," Crane said. "Despite weather, we've seen success in new menu tests including calzones which will roll out to all stores in the coming months. Our support teams are focused on capitalizing on opportunities and customized solutions that deliver top-line sales growth and lower operating costs for our franchisees."

Development review
During the third quarter of fiscal 2019, Pizza Inn domestic unit count including PIE increased by one. Franchisees remodeled three buffet locations in Spartanburg and Duncan, South Carolina and Salem, Missouri.

"This is an exciting time for our remodel efforts which are revitalizing the national image of Pizza Inn," said Bob Bafundo, President of Rave.. "We remodeled three more restaurants this quarter bringing our completed total to seven. These seven stores are seeing an average year-over-year sales increase of 15% since their remodels were completed. Our goal is to remodel an additional four locations by the end of this fiscal year and another four in the first half of next year."

The company is continuing its rollout of Pizza Inn Express, or PIE, which debuted in 2018, and now has eight units.

"We are pleased with the enthusiasm for our new concept, PIE," said Bafundo. "Since it launched, there has been considerable domestic and international interest for PIE from non-traditional food retailers, travel centers, airports, convenience stores, and special event centers.  We now have a pipeline of partners that see great value and opportunity for the brand."
Pizza Inn Express also recently announced its collaboration with FortierInc, a supplier of store equipment to the convenience store and food services industries.

"As we grow, we continue to find new ways to stay top of mind. This alliance with Fortier fits our strategy to utilize dynamic relationships across segment," Bafundo said.