Falling same-store sales led to lower margins and smaller profits at Famous Dave’s of America Inc. in the second quarter, the company said on Monday.
Same-store sales fell 6.4 percent at company locations in the quarter ended July 3. That’s on top of a 10.8 percent decline in the same period a year ago, making for a two-year decline of 17.2 percent at company locations.
Franchisee same-store sales fell 4.3 percent in the quarter.
Net income fell by more than two-thirds, to $140,000, or 2 cents per share, from $654,000, or 7 cents per share.
"The effects of strategic actions implemented in the past year, which have improved guest satisfaction and improved value on the menu, leads confidence in our plan and the path ahead, especially as we continue to add additional affordability to the menu and start to reinvest in marketing,” CEO Adam Wright said in a statement.
Famous Dave’s is based in Minneapolis and has 179 locations, 37 of which are company owned.
Revenues in the quarter fell 14 percent to $28 million from $32.7 million. The company said that restaurant level operating margin fell to 9.5 percent of revenue from 10.1 percent, as higher food costs and higher labor expenses offset lower overall expenses due to reduced sales.
Correction: Aug. 16, 2016 An earlier version of this story misstated Famous Dave's second-quarter net income. It fell to $140,000.