Rave Restaurant Group Inc.’s Pie Five Pizza and Pizza Inn brands both saw same-store sales decline in the third quarter amid economic headwinds that the company said Wednesday were being addressed.
Same-store sales fell 4 percent at fast-casual Pie Five and decreased 2.2 percent at domestic Pizza Inn locations in the quarter ended March 27, the company said.
"Comps for the quarter were disappointing,” said Randy Gier, Rave CEO, in a statement with the earnings release. “And while we are experiencing similar headwinds as the rest of the industry, we have identified root causes and corrective actions that will take place over the coming quarters.”
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For the third quarter, Rave reported a widened loss of $1.2 million, or 12 cents a share, from a loss of $570,000, or 5 cents a share, in the same period a year ago. Revenue in the quarter rose 28.2 percent, to $15.3 million, from $11.9 million in the prior-year period.
Pie Five saw average weekly sales decline 8.6 percent year over year, the company said.
“The decrease in Pie Five average weekly sales was primarily due to the decline in comparable-store sales, as well as the entry into new company markets and several franchise stores that opened with particularly high volumes in the prior year,” the company said.
Rave is targeting strategies to improve Pie Five sales, Gier said.
“We are emphasizing operations and service initiatives designed to enhance efficiency, throughput and guest experience that we believe will allow us to continue the positive comparable-store growth trend that we previously experienced," he said.
Six new Pie Five restaurants opened during the quarter, bringing its total unit count to 85 locations.
"The highlight for the quarter was continued expansion of the Pie Five system," Gier said.
However, several factors were cited for Pie Five’s same-store sale decline, including new franchise units entering the comparable base in the quarter and lapping the year-ago honeymoon period, some cannibalization from new restaurants in the Dallas market, road construction affecting sales at one new franchise restaurant in the comparable base, and a Dallas area television campaign in the prior year quarter.
“Our comparable-store base is growing but still small, and thus individual store events can cause a material impact on comparable performance,” the company said in its earnings release.
Rave Restaurant Group owns, operates and franchises more than 300 Pie Five Pizza Co. and Pizza Inn restaurants, mostly buffets, in the United States and abroad.
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