Rave Restaurant Group, Inc. RAVE unveiled a remarkable performance in fiscal 2024, showcasing a stellar rise in both earnings and revenues, a triumph which wasn’t lost on Wall Street. The company reported an impressive earnings per share (EPS) of 6 cents in the fourth quarter of fiscal 2024, marking a substantial 50% climb year over year. What’s more, its full-year EPS stood at 17 cents, a whopping 70% surge compared to the similar period in fiscal 2023.
A Look Into RAVE’s Revenue Growth
Rave Restaurant Group’s revenues for the fiscal fourth quarter soared to $3.4 million, reflecting a substantial increase of $0.3 million year over year. The elation was somewhat tempered due to lower revenues from the Pie Five Franchising segment. However, the full-year revenues of $12.2 million still managed an admirable 2.2% uptick from the corresponding period in fiscal 2023, propelling the company’s stock nearly 20% as of the latest trading.
Segmental Success of Rave Restaurant
Rave Restaurant’s revenue streams are bifurcated into two primary segments — Pizza Inn Franchising and Pie Five Franchising. In the evaluated quarter, Pizza Inn Franchising witnessed a 1.5% decrease in domestic comparable store retail sales year over year, while Pie Five trailed with a steeper 10.6% decline. Pizza Inn’s domestic units numbered 105 by the end of the fiscal fourth quarter, with an additional 24 international units. In contrast, Pie Five’s domestic units stood at 20 during the same period.
For the entire fiscal year, Pizza Inn Franchising managed revenue of $10.3 million, enjoying a healthy 4.9% increase from fiscal 2023, thanks to escalated supplier and distributor incentives. Moreover, Pizza Inn recorded a 2.3% rise in domestic comparable store retail sales for the fiscal year ending June 30, 2024. Despite this, Pie Five Franchising witnessed a revenue dip of 8.9% in fiscal 2024 compared to the previous year, primarily due to a decline in domestic royalties and advertising fund revenues.
Breakdown of Operating Expenses
Cutting down on operational costs, Rave Restaurant saw its general and administrative expenses dip by 4.1% to $5.3 million in fiscal 2024, attributed to decreased salary and stock-based compensations. The franchise expenses also witnessed a commendable reduction, plummeting 7.6% to $3.7 million at the end of fiscal 2024.
Celebrating Profitability Peaks
The company’s operating income for the entire fiscal year 2024 surged by a substantial 43.8% from fiscal 2023, hitting $3.1 million. Furthermore, Rave Restaurant’s net income for fiscal 2024 painted an even rosier picture, ballooning by 53.3% compared to fiscal 2023. This upward trajectory was further bolstered by an adjusted EBITDA of $3.2 million for the fiscal year, marking a noteworthy 16.8% rise from the previous year.
Finance and Future Prospects
Ending fiscal 2024 on a high note, Rave Restaurant bid farewell with robust liquidity, boasting cash and cash equivalents amounting to $7.8 million, a significant leap from $5.3 million at the close of fiscal 2023. The accumulated net cash provided by operating activities for fiscal 2024 was $2.7 million, a slight increase from a year earlier, standing at $2.6 million.
Analysis and Future Outlook
Rave Restaurant’s stellar performance in fiscal 2024 paints a picture of triumph, with robust revenues fueling investor optimism. The resurgence in revenues from the Pizza Inn Franchising segment and the concurrent boost in domestic comparable store retail sales have been particularly reassuring. With projections indicating that more than 25% of the company’s buffet restaurants will be revamped by the end of fiscal 2025, the future seems bright for the investors.
Noteworthy advancements during the fiscal fourth quarter include the rollout of a new online ordering platform, poised to heighten its digital business by seamless integration with point-of-sale systems, indicating promising growth prospects.
However, setbacks stemming from lower revenues in the Pie Five Franchising segment and subdued domestic comparable store retail sales remain as areas of concern for Rave Restaurant going forward.
