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Vaidik Trivedi
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DALLAS, February 1, 2024 (Newswire.com)
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RAVE Restaurant Group, Inc. (NASDAQ: RAVE) today reported financial results for the second quarter of fiscal 2024 ended December 24, 2023.
Second Quarter Highlights:
“Following a strong Q1, we’ve hit our 15th consecutive quarter of profitability with steady same-store sales growth at both Pizza Inn and Pie Five in Q2,” said Brandon Solano, Chief Executive Officer of RAVE Restaurant Group, Inc. “This fiscal quarter, we focused on our unwavering commitment to maintain tight cost control, which has been a cornerstone of our success. Our disciplined financial approach has allowed us to effectively navigate the competitive landscape, while our commitment to operational efficiency has positioned us for continued success in the ever-evolving market.”
“Despite a slight decrease in total revenue, we saw steady profit growth with net income reaching $0.6 million compared to $0.3 million in the same period last year,” Solano continued. “This is a testament to the dedication of our team and the effectiveness of our financial strategies, positioning us for sustained growth and shareholder value.”
“We’re also thrilled to welcome three new Pie Five franchisees into our family, taking over locations throughout Texas,” said Solano. “Their partnership underscores the attractiveness of our brand and continued confidence in our business model. Even in the face of varying same-store sales, including Pizza Inn’s impressive 7.0% increase and Pie Five’s solid 0.8% growth in Q2, our strategic initiatives have contributed to our overall positive financial performance.”
On reimaging, Solano noted, “We’ve embarked on a significant journey to reimagine our stores, and I’m excited to announce 10 more Pizza Inn restaurants are set to begin the process, which elevates both the aesthetics and functionality. These dramatic updates reflect our commitment to enhancing the overall experience for both our franchise partners and guests, and we’ve been pleased to see strong results from the completed prototype in Asheboro, North Carolina. We anticipate completing most of these transformations before the end of the fiscal year.”
“As part of our strategic vision, we’ve strengthened our organization by continuing to invest in key areas such as analytics, development and IT,” Solano stated. “The addition of team members to these functional areas reflects our commitment to innovation and growth.”
Non-GAAP Financial Measures
The Company’s financial statements are prepared in accordance with United States generally accepted accounting principles (“GAAP”). However, the Company also presents and discusses certain non-GAAP financial measures that it believes are useful to investors as measures of operating performance. Management may also use such non-GAAP financial measures in evaluating the effectiveness of business strategies and for planning and budgeting purposes. However, these non-GAAP financial measures should not be viewed as an alternative or substitute for its financial statements prepared in accordance with generally accepted accounting principles.
The Company considers EBITDA and Adjusted EBITDA to be important supplemental measures of operating performance that are commonly used by securities analysts, investors and other parties interested in our industry. The Company believes that EBITDA is helpful to investors in evaluating its results of operations without the impact of expenses affected by financing methods, accounting methods and the tax environment. The Company believes that Adjusted EBITDA provides additional useful information to investors by excluding non-operational or non-recurring expenses to provide a measure of operating performance that is more comparable from period to period. Management also uses these non-GAAP financial measures for evaluating operating performance, assessing the effectiveness of business strategies, projecting future capital needs, budgeting and other planning purposes.
“EBITDA” represents earnings before interest, taxes, depreciation and amortization. “Adjusted EBITDA” represents earnings before interest, taxes, depreciation and amortization, stock compensation expense, severance, gain/loss on sale of assets, costs related to impairment and other lease charges, franchise default and closed store revenue/expense, and closed and non-operating store costs. A reconciliation of these non-GAAP financial measures to net income is included with the accompanying financial statements.
Note Regarding Forward-Looking Statements
Certain statements in this press release, other than historical information, may be considered forward- looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, and are intended to be covered by the safe harbors created thereby. These forward-looking statements are based on current expectations that involve numerous risks, uncertainties and assumptions. Assumptions relating to these forward-looking statements involve judgments with respect to, among other things, the effectiveness of our cost-cutting measures, the timing to complete as well as the continued returns on our reimaging initiatives, the strength of our development pipeline, as well as future economic, competitive and market conditions, regulatory framework and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond the control of RAVE Restaurant Group, Inc. Although the assumptions underlying these forward-looking statements are believed to be reasonable, any of the assumptions could be inaccurate and, therefore, there can be no assurance that any forward-looking statements will prove to be accurate. In light of the significant uncertainties inherent in these forward-looking statements, the inclusion of such information should not be regarded as a representation that the objectives and plans of RAVE Restaurant Group, Inc. will be achieved.
Source: RAVE Restaurant Group, Inc.
Vaidik Trivedi
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Vaidik Trivedi
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Brian Stone
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The fast-moving consumer goods (FMCG) market may have felt the heat of rising inflation and, resultantly, slowing demand for daily essentials like instant noodles, soaps and detergents, but the leading players have surely learnt the trick to stay afloat. If their recent performance to go by, the country’s top FMCG companies have managed to pull off a show that is highly contrasting to the performance of the overall market as Indian consumers continued to cut down on their purchases.
Take a look at these numbers.
During the July-September quarter, India’s FMCG market registered a little over 5 per cent value growth, while its volumes shrank by 5 per cent year-on-year – as per data from market analytics firm Nielsen.
While largest full range player Hindustan Unilever’s (HUL) net sales grew by 16 per cent y-o-y to Rs 14,872 crore and net profit surged 11.7 per cent to Rs 2,670 crore. Salt-to-cigarettes major ITC’s net revenue jumped 27 per cent to Rs 16,130 crore, while its net profit grew 21 per cent to Rs 4,466 crore.
Nestle India that rules the instant noodles, instant coffee and infant formula market, managed to grow its net sales by over 18 per cent to Rs 4,567 crore and its net profit by 8.3 per cent to Rs 668 crore. Mumbai-based Tata Consumer that runs the popular Starbucks coffee chain in India, saw its operating revenue and net profit surge by 11 per cent and 36 per cent, respectively during the September quarter.
Surely, they got somethings right which the other players failed to gauge. Here are the factors that analysts from leading brokerages like Motilal Oswal, Axis Securities, ICICI Securities and Novae, among others, think have worked for them:
Hindustan Unilever:
The company’s focus on growing its consumer base and protecting its business model played a crucial role in its superior performance, says CEO & MD Sanjiv Mehta.
2. According to ICICI Securities, its work in category development has borne fruits. During the quarter, its premium discretionary categories “outperformed” mass categories.
3. A sharp 14 per cent cut on its advertisement and promotional (A&P) expenses helped the company reduce pressure on EBITDA margin, which stood at 23 per cent – down by 174 basis points y-o-y. Though, HUL’s gross margin shrank by 600 bps.
ITC:
A stable tax and demand environment boosted ITC’s cigarettes business and volumes grew by a whopping 20 per cent. As a result, revenue from cigarettes business surged 23 per cent to Rs 5,920 crore in September quarter. Its continued efforts “to engage with policy makers to work on creating a framework of regulations and taxation policies in India,” analysts at Motilal Oswal noted.
Non-cigarettes FMCG business was boosted by staples and convenience foods that recorded growth mainly driven by biscuits (Sunfeast), atta (Aashirbad wheat flour) and instant noodles (Yipee). Discretionary and Out-of-Home categories witnessed strong traction while personal wash products performed well.
Increasing market and outlet coverage helped its performance further. In September, its market coverage was double of pre-COVID levels, while outlet covered was 30 per cent higher.
Nestle India:
Higher spend on A&P and increasing distribution, backed by festive demand, lifted Nestle’s performance across categories.
Growth has been strong in large metros and mega cities and continued to be robust in small towns and rural markets. Strengthening consumer engagement played a key role in urban markets, while growing penetration in rural market and adding new consumers helped it offset the slowdown in the hinterlands.
Milk products and nutrition (the largest business segment by revenue) performed well with good growth also seen in Milkmaid, while confectionary had support from on-ground initiatives and aggressive media campaigns. Maggi noodles drive good performance in Prepared Dishes (second largest segment) and Beverages saw good growth in coffee across, said ICICI Securities.
Tata Consumer:
Strong growth in Starbucks business: Revenue grew 57 per cent y-o-y led by normalisation of out-of-home consumption as 99 per cent of Starbucks stores are now open. Rolled out rolled out 25 new outlets taking the number of outlets to 300 in 36 cities.
Grown distribution to 1.4 million outlets and number of super stockiest was up by 20 per cent y-o-y.
Revenue from e-commerce surged 40 per cent to 9.2 per cent of its overall revenue. Sales through modern trade outlets grew 18 per cent.
Revenue from Tata Coffee business surged 41 per cent, while foods business in India recorded a 29 per cent jump.
Additionally, experts said that continued to formalisation of the sector – consumers moving from unbranded and/or regional brands to global and national brands owned by leading FMCG players, have also helped market leaders gain over smaller companies in the sector.
Also read: ITC Q2 results: Profit rises 24% to Rs 4,670.32 crore
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