Pie Five’s struggles continued in the quarter ended Dec. 23, as the fast-casual pizza chain closed eight more locations while same-store sales fell 3.6%, parent company Rave Restaurant Group said Wednesday.
The Dallas-based fast-casual pizza chain, which two years ago had about 100 locations, is now down to 65 following a string of weak same-store sales. On a two-year, stacked basis, the chain’s same-store sales fell 16.7% in the company’s fiscal second quarter.
“At Pie Five, we’re addressing restaurant-level challenges and stabilizing the system for future growth,” Bob Bafundo, Rave’s president, said in a statement. “We are confident that Pie Five is starting to gain traction with these initiatives.”
But he added that “we anticipate additional consolidation from first-generation restaurants,” though the company said it has “strong interest” in its more delivery- and takeout-focused “Goldilocks” model.
Sister chain Pizza Inn saw same-store sales rise 2.7% in the company’s fiscal second quarter—the eighth straight quarter of growth for the buffet pizza concept. Bafundo said that its all-day buffet, rolled out more than 14 months ago, “continues to drive transactions,” especially during the afternoon and late in the evening.
Online ordering sales, meanwhile, have grown in the double digits and the company said that new technology “should continue to build on this trend.”
Pizza Inn operates 148 locations in the U.S. and 48 internationally. It also operates seven Pizza Inn Express, or PIE, locations. The express units are targeted at nontraditional locations such as airports and travel centers. “We see endless possibilities and applications for the PIE model,” Bafundo said.
Pie Five initially emerged as an express concept and evolved into one of the pioneering concepts in the fast-casual pizza space.
But steep declines in same-store sales the past three years have cut the brand’s unit count by a third and forced changes in the company’s business model.
The company has focused on takeout rather than dine-in sales, and it developed its new prototype with those sales in mind. “With consumer research showing changing consumer preferences, Pie Five is shifting towards a business model focused on delivery, online ordering, carryout and drive-thru initiatives,” Bafundo said.
Bafundo said the company expects operators will adopt the new model, which will feature improved unit economics and could strengthen the brand going forward.
Rave Restaurant Group turned a profit in the first six months of the company’s fiscal year, including a $200,000 profit in the second quarter, compared to a loss of $600,000 in the same period a year ago.
Revenues fell 24% to $3.2 million, due largely to closed company-owned restaurants.
Scott Crane, the company’s CEO, said that “efforts to consolidate operations, including closing underperforming restaurants and upgrading technologies, have made our performance less volatile and more predictable.”
“We’ve shored up the balance sheet, improved our cash position, and are generating positive cash flows from operations,” he added.
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