Rave Restaurant Group’s fast casual, Pie Five, closed 10 domestic restaurants in Q3, the company announced Monday. With no openings to counter, the move dropped it down to 43 locations at period’s end, which closed March 29.
As of today, Pie Five has 32 restaurants open, with six temporary closures, Rave said.
Pie Five’s decline has been steady in recent years. It closed Q2 with 53 U.S. locations and has now reported 18 consecutive periods of declining sales after comps plunged 21.4 percent in Q3, year-over-year. That stacked on a 4.4 percent decline in Q3 2019 that followed a 12.6 percent drop in Q3 2018.
Pie Five had 65 restaurants headed into this quarter last year. In February 2017, it debuted its 100th unit in Independence, Missouri. There were 86 in March 2018 and 73 that September.
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According to FoodserviceResults, Pie Five retracted from 75 to 54 restaurants from 2018 to 2019 and saw its sales decline 38.2 percent to $42 million from $68 million.
“During this unprecedented time for the restaurant industry, I’m extremely proud of how our franchisees and team members have responded,” said CEO Brandon Solano, who joined the company in October, in a statement Monday. “I’ve been inspired by our system’s resilience and their tireless efforts to ensure that our restaurants remain a safe place to work and dine during the coronavirus outbreak.”
Rave’s total revenue decreased by $400,000 in Q3 to $2.7 million, year-over-year. Loss before taxes was $500,000 compared to $300,000 in the year-ago period. On a fully diluted basis, net loss increased 28 cents per share to 30 cents per share versus $0.02 per share in 2019. Net loss was $4.5 million compared to $300,000. EBITDA was in the red at negative $400,000, a $300,000 decrease from last year.
Rave’s cash and cash equivalents decreased $400,000 in the quarter to $1.5 million as of March 29.
The company’s other brand, Pizza Inn, took a 7.8 percent hit in Q3 same-store sales, year-over-year. Year-to-date, its comps are down 1.2 percent over 2019 levels.
“As our buffet business was particularly challenged, we took prompt action to maximize value to guests and reduce the impact of dining room closures,” Solano said. “Pizza Inn launched Contactless Buffet To-Go for carryout and delivery to provide guests a customized buffet option in the comfort and safety of their own homes.”
“We also recognized the need for off-premise solutions and quickly expanded our online footprint along with negotiating favorable terms with third-party delivery services,” he added. “Last month, we introduced the ‘Right Way Buffet’ that allows our buffet locations to open their dining rooms while practicing enhanced health and safety measures.”
Pizza Inn opened three U.S. stores in Q3 and closed four to finish the period with 152 domestic restaurants comprised of 83 buffet units, 56 delco/express venues, and 13 PIE kiosk spots. As of today, there are 79 buffets, 53 express, and 12 PIE shops open, with eight temporary closures.
Pie Five’s same-store sales are down 14.4 percent year-to-date.
“At Pie Five, we are continuing to work with franchisees to mitigate the effects of the pandemic,” Solano said. “Although sales and traffic continue to reflect the impact of this crisis, we believe the investments we made in building a strong loyalty program, third-party delivery partnerships and digital capabilities have positioned us to stay connected to our consumers. Our everyday value offerings have helped to ensure that all of our guests have access to affordable dining options throughout this crisis. I’m also proud of our efforts to serve essential workers that have been bravely serving us in communities across the country.”
Since the onset of COVID-19, Rave furloughed two-thirds of its support staff and instituted an across-the-board 20 percent pay reduction for all other employees and executive leadership.
