Fiscal results continue to be disappointing for Dallas-based Rave Restaurant Group, which saw an 11% drop in same-store sales for Pie Five, although Pizza Inn saw improvement with a 2.4% increase in same-store sales for the second quarter ended Dec. 29, 2019.
Revenue for the second quarter decreased 11.4% to $2.83 million, down from $3.2 million a year earlier. Net income decreased 93% to $14,000 or 0 cents per share, down from $200,000 or 2 cents per share a year earlier.
The announcement of the weak quarterly results comes on the heels of a Rave Restaurant Group executive team shakeup, with the addition of new vice president of finance Clint Fendley (from 7-Eleven) as announced in January, and the appointment of new CEO Brandon Solano (from Pei Wei Asian Kitchen) in October 2019. Another Pei Wei alum, Mike Burns, followed as the company’s new chief operations officer in November 2019.
“We are developing a comprehensive turnaround strategy that builds on key strengths, and although this is not reflected in our second quarter results, we now have leadership in place to help,” CEO Brandon Solano said during the second quarter earnings call. “We're doubling down on our efforts to address underperforming areas of the business, and see significant opportunities in marketing, menu innovation and operational efficiencies.”
Solano said that they are also investing in consumer research and marketing initiatives to make Pizza Inn more competitive, especially compared with other brands in the same category, such as Domino’s Pizza Hut and Papa John’s.
For Pie Five, Solano said that he wants to shift its marketing strategy to emphasize its brand differentiator: that it is a fast-casual pizza chain and not a QSR like many of its industry competitors.
“Pie Five still has expansion opportunities and we expect development to increase once we transform the brand and restore positive momentum,” Solano said.
Rave Restaurant Group closed net two units during the second quarter for a total of 206 stores across both brands.
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