Rave Restaurant Stock Gains Post Q2 Earnings and Pizza Inn Growth

Shares of Rave Restaurant Group, Inc. RAVE have gained 6.4% since the company reported its earnings for the quarter ended Dec. 28, 2025. This compares to the S&P 500 Index’s 0.3% growth over the same time frame. Over the past month, the stock gained 8.8% against the S&P 500’s 0.9% decline.

Rave Restaurant’s Earnings Snapshot

For the second quarter of fiscal 2026, RAVE reported total revenues of $3 million, up 6% from $2.9 million in the prior-year quarter. Net income rose 4.9% year over year to $0.64 million from $0.61 million. On a diluted basis, earnings per share were unchanged at $0.04 compared with the year-ago period. Income before taxes increased 12.1% to $0.84 million from $0.75 million, reflecting improved operating leverage.

By segment, Pizza Inn comparable domestic store retail sales increased 2.5% in the quarter, while Pie Five comparable domestic store retail sales declined 1.5%, underscoring divergent brand performance.

RAVE’s Segment Performance and Retail Trends

Pizza Inn remained the primary growth driver. Domestic retail sales for the brand rose 4.1% year over year to $26.9 million in the quarter from $25.9 million. Comparable store retail sales increased 2.5%, supported by a higher average buffet unit count. Franchise and license revenues for Pizza Inn increased 10.5% in the quarter, driven by higher supplier and distributor incentives and domestic royalties.

In contrast, Pie Five continued to face headwinds. Domestic retail sales fell 16.3% to $2.3 million from $2.7 million, reflecting both a lower average unit count and a 1.5% decline in comparable store retail sales. Franchise revenues for Pie Five declined 21.7% year over year in the quarter due to reduced royalties and supplier incentives tied to lower system-wide sales.

Rave Restaurant Group, Inc. Price, Consensus and EPS Surprise

Rave Restaurant Group, Inc. price-consensus-eps-surprise-chart | Rave Restaurant Group, Inc. Quote

Rave Restaurant’s Profitability and Expense Trends

Operating income increased 11.7% to $0.74 million from $0.66 million in the prior-year quarter. Adjusted EBITDA rose 5.6% year over year to $0.9 million from $0.8 million.

General and administrative expenses increased 15.6% in the quarter, primarily due to higher salaries and legal fees. However, franchise expenses declined 11.7% year over year, reflecting lower salaries directly related to franchise operations. Depreciation and amortization expense decreased 20.8% to $42,000 from $53,000.

Interest income increased 4.6% to $91,000 from $87,000, primarily due to returns on U.S. Treasury bills and highlighting the benefit of Rave Restaurant’s liquidity position.

RAVE’s Liquidity and Financial Position

RAVE ended the quarter with $10.9 million in cash and short-term investments. The balance sheet showed no debt and total shareholders’ equity of $15.5 million as of Dec. 28, 2025. Management indicated that cash on hand and operating cash flow are expected to be sufficient to fund operations for at least the next 12 months.

For the first six months of fiscal 2026, cash provided by operating activities totaled $0.9 million, compared with $1.2 million in the prior-year period, with the decrease largely attributed to higher prepaid expenses.

Rave Restaurant’s Management Commentary

Chief Executive Officer Brandon Solano noted that the second quarter marked Rave Restaurant’s 23rd consecutive quarter of profitability, underscoring continued execution of its “Mission 2030” strategy. Solano highlighted the opening of three new Pizza Inn buffet restaurants during the quarter — all within a three-week span — describing the milestone as evidence that the company’s development, training and operations teams are capable of scaling new restaurant openings more efficiently.

Solano acknowledged broader industry pressures, including sluggish growth and traffic challenges, but pointed to Pizza Inn’s continued positive same-store sales performance as a differentiator.

Chief Financial Officer Jay Rooney added that fiscal second-quarter results were driven by improved sales at Pizza Inn, while noting that Pie Five comparable sales, although improved from prior trends, remained negative. Solano emphasized that the company’s balance sheet remains strong, with no debt and high liquidity, positioning RAVE for future stability and growth.

RAVE’s Outlook

Looking ahead, management expects Pizza Inn to continue benefiting from unit expansion and sustained comparable store sales momentum. Rave Restaurant believes domestic and international Pizza Inn unit counts will increase modestly in future periods, supported by the development pipeline and recent execution capabilities.

For Pie Five, management anticipates modest unit declines in the near term as it works to reposition the brand. Efforts remain focused on improving performance through advertising, product innovation, operational efficiencies and pricing initiatives.

Rave Restaurant’s Other Developments

During the quarter, Pizza Inn domestic unit count finished at 97 locations, including 82 buffet units, with three new buffet openings and no buffet closures. Pizza Inn international units totaled 19, while Pie Five domestic units ended the quarter at 16. RAVE also closed its remaining ghost kitchen locations during the quarter, reflecting continued streamlining of the brand portfolio.

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