MINNETONKA Minn. Famous Dave’s of America Inc. swung to a third-quarter profit from a loss in the same quarter a year ago on better cost controls and lower impairment charges, the company reported. It saw revenue dip, however, as systemwide same-store sales remained negative.
The Minnetonka-based company said net income for the quarter ended Sept. 27 totaled $1.2 million, or 13 cents per share, versus a net loss of $763,000, or 8 cents a share, in the prior year’s third quarter.
Asset impairment, estimated lease termination and other closing charges totaled $446,000 in the latest quarter, compared with $3.9 million in such charges a year ago. Excluding those charges the company said it reduced other costs and expenses by 3.9 percent on a year-over-year basis.
Third-quarter revenue fell 5.1 percent to $33.3 million. Same-store sales fell 6.8 percent at corporate restaurants and 9.5 percent at franchised locations. Famous Dave’s opened seven new units from a year ago, it said.
“The sales environment for the entire casual-dining sector remains challenging, but I remain excited about the energy we’ve created with our marketing efforts,” said Christopher O’Donnell, Famous Dave’s chief executive. “We’ve continued to make progress in our efforts to control costs and have worked hard to strengthen our balance sheet.”
Company officials said third-quarter sales trends at corporate restaurants reflected general declines in consumer spending slightly offset by the impact of average price increases of about 2 percent, which were taken prior to 2009. The company said it expects to take a 1-percent price increase in December.
Famous Dave’s officials said the company expects to open a minimum of eight franchised restaurants in 2010, but added that development plans for corporate stores are “still being evaluated.”
For the 39 weeks ended Sept. 27, Famous Dave’s reported net income of $4.9 million, or 54 cents per share, up 110 percent from the prior year’s profit of $2.3 million, or 24 cents a share. Revenue fell 3.9 percent, to $103.4 million, as corporate and franchised unit same-store sales fell 7.3 percent and 8.8 percent, respectively.
O’Donnell explained that the chain has “responded to the current business climate with promotions geared towards driving traffic through a balance of value-oriented and premium items, as well as promotions that enhance our already strong brand.” He noted that the ‘Dave’s Day’ event that was part of the chain’s 15th anniversary celebration “drove traffic and delivered sales that rivaled our largest day, Fathers Day.”
Famous Dave’s operates 45 namesake barbecue restaurants and franchised 133 outlets.
Contact Al Liddle at [email protected].