Rave Restaurant Group Inc., parent to the fast-casual Pie Five Pizza Co. and buffet Pizza Inn brands, widened its losses on special charges in the second quarter ended Dec. 27, the company reported Wednesday.
The Colony, Texas-based Rave reported a net loss of $4.8 million, or 47 cents a share, compared with a loss of $399,000, or 4 cents a share, in the same period last year. The company said $4.5 million of the loss included $1 million in impairment expenses for the closure of three company-owned Pie Five restaurants and a $3.5 million allowance against deferred tax assets as well as other expenses.
Rave said revenue grew 37.6 percent in the quarter, to $15.3 million, from $11.1 million in the 2014 period.
Same-store sales at the fast-casual Pie Five Pizza Co. concept fell 1.6 percent in the quarter. Pizza Inn domestic same-store sales decreased 1.7 percent from the same period last year.
“Pie Five was overlapping significant, double-digit comparable store gains in the prior year,” the company said. “Pie Five has experienced some cannibalization from new restaurants in the Dallas market, which makes up a disproportionate share of the current comparable store base.” The Pie Five concept debuted in June 2011 in Fort Worth, Texas.
Randy Gier, Rave CEO, said the company closed the three company locations that were identified as what he called “poor real estate selections.” The company has evolved its criteria for new unit development, he added.
“We entered several new company-owned Pie Five markets in the past year, which allowed us to gain a foothold in several large metropolitan markets,” Gier said in a statement. “Sales in some of these areas have been slower to materialize than expected."
In the second quarter, Rave added 14 new Pie Five restaurants — three company-owned and 11 franchised. As of Dec. 27, the fast-casual pizza brand had 82 restaurants.
"We are excited to be further expanding the geographic reach of Pie Five as we march toward the 100-restaurant mark,” Gier said.
In the second quarter, Pie Five opened franchised restaurants in the new markets of Arkansas, Colorado, Delaware and Kentucky. The Pie Five division now has 49 franchised units and 33 company-owned restaurants in 24 states.
In addition to Pie Five, Rave has the buffet-oriented Pizza Inn concept, founded in 1958, with locations in the United States and abroad. The company has more than 300 restaurants total.
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