Pizza Inn plans to accelerate Pie Five openings

Nov. 8, 2012

Texas-based Pizza Inn Holdings Inc. reported its first quarter FY 2013 results, which included a sales increase of 41.4 percent compared to Q1 '12 at company-owned units.

First quarter net income decreased $0.4 million to a loss of $58,000, or $0.01 per share, compared to net income of $0.3 million, or $0.04 per share, for the same quarter of the prior year. The decline was primarily attributable to lower revenue earned from franchising and food and supply sales and higher costs related to the continued development of the Pie Five Pizza Co. concept.

First quarter revenues decreased to $10.4 million in fiscal 2013. Food and supply sales decreased by approximately $1.2 million, or 13.4 percent, due to the combined impact of a decrease in the average number of restaurants open, a 9.4 percent decrease in total domestic franchisee retail sales and a decrease in non-proprietary items purchased from the company by franchisees.

"We continue to develop and expand our Pie Five concept with the addition of one new store opened in the fiscal first quarter and our eighth store in October," Clinton Coleman, interim president and CEO, said in a press release. "We are pleased with the performance of the last several new stores and are planning to accelerate the opening of Pie Five stores in the second half of fiscal 2013."

Coleman added that the company's experienced multiunit operators in many markets are expressing interest in the Pie Five fast casual concept, which was initially introduced in 2011.

"We continue to invest in people and infrastructure in anticipation of further development of company-owned and franchised units of our Pie Five concept," he said.

Meanwhile, retail sales in the Pizza Inn system were impacted by pricing competition in the pizza segment.

"While food and supply sales relative to total domestic franchisee sales remained below our historical norms during the first quarter, the trend improved from the pace of the third and fourth quarters of fiscal 2012. We continue to evaluate new initiatives for providing high-quality, non-proprietary food products to our franchisees," Coleman said.

Read more about operations management.

Topics: Franchising & Growth, Operations Management, Pizza Inn

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