Rave Restaurant Group Inc., parent to the Pie Five Pizza Co. fast-casual chain and Pizza Inn buffet brand, widened its loss in the first quarter ended Sept. 27, the company reported Thursday.
The Colony, Texas-based company cited increased opening expenses for owned Pie Five restaurants for the net loss of $557,000, or 5 cents a share, compared with a loss of $266,000, or 3 cents a share, in the same quarter last year. Revenue increased 28.6 percent, to $14.5 million, from $11.3 million in the prior-year period.
Same-store sales increased 1.5 percent at Pie Five over last year’s quarter, and decreased 1.1 percent at Pizza Inn, the company said.
"We recently entered several new corporate store markets for Pie Five and incurred additional expenses related to that extension of our growth plan,” Randy Gier, Rave CEO, said in a statement.
Rave opened six company-owned Pie Five units in the quarter, and franchisees opened eight. The concept now has 68 units total.
The company said Pie Five’s systemwide average weekly sales declined 4 percent from the comparable quarter last year.
“The decrease in average weekly sales was due primarily to company-owned stores opened in new large metropolitan markets where brand recognition has not yet been established,” Rave said in a press release.
“This impact was partially offset by higher-than-average volume openings in the Dallas/Fort Worth market and in franchised markets,” it said.
Gier added that, "Pie Five comps in the first quarter decelerated toward the end of the period due to modest cannibalization caused by several new stores in the DFW [Dallas/Fort Worth] market and a shift in the timing and scope of TV advertising as compared to the prior year period.”
Gier said the company was continuing to maintain flat pricing on pizzas and was seeing “slightly negative comps” in the current quarter.
The company planned to have 80 Pie Five restaurants open by the end of the second quarter, he said.
“We expect the Pie Five system to cross over the 100-restaurant mark late in our third fiscal quarter,” he added. “Because our pipeline has a high mix of sites in ground-up developments the opening schedule is susceptible to variations in the timelines of real estate developers, especially around the holidays."
Rave, which changed its name from Pizza Inn Holdings Inc. in January, has more than 300 Pie Five and Pizza Inn restaurants.
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