Dive Brief:
- Pinstripes is planning to cut a number of employees as part of a plan to achieve $4 million in savings on corporate costs, CEO Dale Schwartz said Wednesday on the brand’s fiscal Q1 2025 earnings call.
- The “strategic corporate headcount reductions,” as Schwartz termed them, come after declining same-store sales and rising costs pushed the chain’s quarterly losses to $10 million, up from $3 million in the year-ago period.
- Prior to the changes to its corporate operations, the company identified and implemented $10 million in savings at the venue level, Schwartz said, including unspecified “strategic hourly and salaried labor savings.”
Dive Insight:
In addition to the changes to its workforce, Pinstripes is negotiating with agency partners and is looking to achieve greater efficiency in its marketing. As part of the cost savings measures implemented at the venue level, Pinstripes managed to reach “a more favorable credit card processing agreement,” Schwartz said, and used its scale and brand strength to bolster its negotiating position relative to vendors.
Schwartz said the company anticipates that it will achieve EBITDA profitability in Q3 as a result of these changes to its cost structure.
In Q1, the company spent about $11.7 million on store-level labor and benefits, equivalent to 38.1% of its total revenue, an increase of 2% over the proportion of revenue spent on store labor in the year-ago quarter, according to its 10-Q. Corporate labor costs are not separated from general and administrative expenses in the firm’s 10-Q, but its general and administrative expenses increased in absolute terms to $5.5 million, up from $3.5 million a year ago, accounting for 18% of its total revenue, a year-over-year increase of 4.3%.
Pinstripes did not immediately respond to a request to clarify how many corporate employees would be impacted by headcount reductions, or by what means it achieved venue-level labor savings.
The 17-unit eatertainment brand saw same-store sales slide 2.4% in the quarter, according to its earnings report. The chain also cut its projected openings for the year from four to two, according to the earnings call.
Pinstripes’ mature units tend to manage high unit volumes, in excess of $8 million. But the company’s small store count and reliance on food and beverage — a majority of its revenue, according to Schwartz — mean its revenue can be hurt by relatively small changes in traffic at specific units.
Tony Querciagrossa, the chain’s CFO, said adverse weather and changes in events bookings, which help drive food and beverage revenue, played a role in the decline of same-store sales.
