Chief financial officer Tony Querciagrossa is stepping down from the company at the end of February to pursue other opportunities
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Midway through Pinstripes’ first year as a public company, executives expressed optimism that the company would get into a cadence of six-to-eight openings a year by fiscal 2026. In June, there were 22 locations either open or under lease and another “potential 30 sites in various stages of development.”
Pinstripes opened its 18th location during its third quarter, reported Wednesday after market, and plans to open No. 19 in the fourth quarter in Coral Gables, Fla. Beyond that, the company’s unit growth plan is now a bit less clear.
“We still plan to open Coral Gables in Q4. Locations thereafter, we’re being prudent vis-à-vis some of the capital requirements until we raise additional financing,” founder and CEO Dale Schwartz said during the company’s earnings call Wednesday. “We still plan on opening Jacksonville (Fla.) later this calendar year and locations beyond that, we’ll provide a further update soon after we complete some financing and other efforts.”
The slowdown comes as Pinstripes’ performance has largely struggled since last summer, including a same-store sales drop of 7.7% in the third quarter. The company’s operating loss was $3.2 million during the quarter, while its net loss was $8.1 million. Pinstripes’ share price has declined by about 90% since its Wall Street debut in January 2024 and, in mid-September, shares fell under $1 and have remained there since, risking a delisting from the New York Stock Exchange. Earlier this month, the company modified its loan agreement to pull in more funding to bolster topline and bottom-line metrics.
That said, there were some silver linings during the third quarter. The negative 7.7% same-store sales performance was an improvement from negative 9.4% in Q2, for instance. Also, Schwartz and chief financial officer Tony Querciagrossa shared that Pinstripes’ focus on improving profitability at the store and corporate levels “began to shine” in the third quarter, with its initiative of achieving $10 million in annualized savings beginning to flow through the balance sheet. Those savings are coming from strategic hourly and salary labor scheduling, more favorable credit card processing fees, agency partner negotiations, and other efforts. Schwartz said the third quarter was the strongest for corporate profitability in two years, with venue-level EBITDA (earnings before interest, taxes, depreciation, and amortization) margins passing 19% and corporate-level adjusted EBITDA of $2.7 million. Additionally, new stores delivered a $1.3 million improvement in venue-level EBITDA versus last quarter.
“Overall, our profitability improvement was one of the major bright spots. And following the completion of our cost reduction efforts at the venue and corporate level, we believe we have the appropriate cost structure for the business,” Schwartz said.
Also, though same-store sales were hit hard in the beginning of the third quarter, with comp trends in the negative mid-to-high teens, they improved to the mid-single digits by the end of the quarter after marketing and promotional adjustments were made and as events bookings improved. Pinstripes also added value promotions such as happy hour gaming and daily specials and beefed up its local store marketing efforts with activities such as comedy nights, line dancing, trivia nights, and yoga.
“We continue to test programs that we believe are right for our brand and guests, while being quick to discontinue those that did not perform to expectations. We believe we found the right balance as demonstrated by the substantial improvement in our comp performance in recent weeks compared to the second quarter,” Schwartz said.
“While we are pleased with what we have accomplished in righting our cost structure, we remain acutely aware of our needs to improve topline growth trajectory to further realize improved profitability,” he said.
During the earnings call, the company also announced that Querciagrossa is stepping down Feb. 28 to pursue other opportunities outside of the eatertainment industry. No updates were shared about a potential successor in the CFO role.
Contact Alicia Kelso at [email protected]
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