INDIANAPOLIS The Steak n Shake Co. said Friday that corporate cost controls and a 7.8-percent jump in same-store guest traffic helped to swing the company to a second-quarter profit from a year-earlier net loss.
The results topped Wall Street expectations and investors drove the company’s stock price up 20 percent to close at $11.05 on Friday. It was the company’s highest stock price since December 2007.
Same-store sales for corporate restaurants within the 489-unit chain were up by 2.4 percent for the quarter ended April 8. The average per-person check fell 5.4 percent, but guest traffic was up by 7.8 percent, the company said. Steak n Shake, like many in the restaurant industry, most recently has been peddling value-focused menu offerings and lower price points. The chain markets $4 meals and Steakburger Shooters, or mini burgers, for three for $2.89. Many operators have said maintaining guest traffic, even at the expense of check averages, can be a winning strategy against today’s economic stresses.
Steak n Shake’s second-quarter profit totaled $2.3 million, or 8 cents per share, compared with a net loss of $2.8 million, or 10 cents per share, in the year-ago quarter. On average, analysts on had expected a 10-cents-per-share loss in the latest quarter.
Total costs and expenses for the latest quarter fell 5 percent.
Second-quarter revenues fell 0.7 percent to $189.0 million, and reflected the operation of 21 fewer corporate restaurants. Steak n Shake has closed some restaurants and refranchised others since last August, when activist investor Sardar Biglari took over as the company’s chief executive and started restructuring the company. A total of 505 Steak n Shake restaurants were in operation before the restructuring began.
Despite the positive second quarter results, the company still has a loss of $1.2 million, or 4 cents per share, for the six months ended April 8. That compares to a loss of $4 million, or 14 cents per share for the same period a year ago. Same-store sales rose 0.9 percent for the first half of the year, and revenues fell 1.9 percent to $318.7 million.
Contact Bret Thorn at [email protected].