Operations

Q2 sales drop at Pie Five, Pizza Inn

Logo: Provided

February 5, 2021

Pizza Inn and Pie Five parent company, Rave Restaurant Group Inc., reported Friday that the pandemic severely hurt the brands' Q2 sales, which ended Dec. 27.

Pizza Inn reported that comp sales were down 18%, while Pie Five recorded a 16% drop in comp sales. A news release concerning the earnings report did not include the total comp sales quantity for each brand.

"While we continue to work through challenges presented by the pandemic, we are seeing strong indications that the team and strategy we've put into place are taking hold and yielding results in repositioning Rave for long-term success," CEO Brandon Solano said in the release. "We hold significant cash, have limited leverage, and were more profitable in Q2 during the pandemic than we were in Q2 a year ago before COVID-19 was declared a pandemic leading to dining room restrictions and closures.

Systemwide, net income was up for the quarter from $14,000 last year's period to $102,000 this year. Total revenue dropped $0.7 million, to $2.1 million from the previous year's quarter, according to a news release. Total revenue dropped $0.7 million for $2.1 million from the previous year's quarter. Other results include:

• On a fully diluted basis, net income increased 1 cent per share to 1 cent per share compared to no net income the prior year quarter.
• Cash and cash equivalents increased $3.3 million to $6.3 million.
• Pizza Inn domestic unit count finished at 142.
• Pizza Inn international unit count finished at 32.
• Pie Five domestic unit count finished at 37.

Solano said Pie Five's new pricing strategy and product innovation, the Panzano pan pizza, are doing well, which will be key to the brand's success.

"Test stores outperformed the rest of the Pie Five system by double-digit percentages in increased traffic and sales," he said. "Panzano pan pizza is something most other fast-causal pizza players are hard-pressed to duplicate due to our oven technology and is amazingly craveable, using house-made dough and whole milk mozzarella shredded in-house from block. We are in the process of rolling this product and pricing strategy out to Pie Five stores nationally and expect to be completed in February. We anticipate significant other innovation to follow."

Pizza Inn is testing a POS tech to eventually add to all locations, and although the brand launched Pizza Inn's Contactless Buffet To-Go and Right-Way Buffet, Solano said leaders were still looking forward to increased vaccine distribution, which they expected to dine-in restrictions. When that happens, he said, the brand will launch some "key innovations specifically designed to enhance the buffet experience."

"Our results this quarter are once again a testament to the incredible efforts by our team to control costs amid the continuing effects of the pandemic," Clint Fendley, Rave vice president of Finance, said in the release. "Our focus on cost controls yielded another quarter of profitability as the income before taxes for the six months ended December 27, 2020 was $182 thousand. RAVE's cash balance of $6.3 million further bolsters our position as we deal with the lingering effects of the pandemic while working to revitalize both of our brands. Although we have experienced modest store closures, the closures have been less than we expected when the pandemic began and are a credit to the tenacity of our franchisees."