Famous Dave's earnings show sales uptick

Article by: MOLLY YOUNG , Star Tribune
Updated: July 29, 2010 - 8:04 PM

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Famous Dave's of America Inc. posted increased second-quarter profits and improved sales and traffic, two benchmarks of consumer confidence that are being closely watched in the restaurant industry.

The Minnetonka-based barbecue chain reported net earnings of $2.5 million, or 29 cents per share, after the market close Wednesday, a 4 percent gain from the same time in 2009. The company's results included gains in several states hardest hit by the recession.

Earnings per share were a penny higher than expected by Feltl and Co., a Minneapolis securities firm that follows the company. Sales of $40.7 million were below estimates of $41.1 million but still up 9.4 percent from the same period in 2009.

Same-store sales increased 0.6 percent at company-owned restaurants between April and July, a significant rise over the same time last year, when same-store sales dropped 9.4 percent. The quarter's results marked the first full reporting period since the chain acquired seven franchise restaurants in March, shifting the number of company-owned outlets from 45 to 52.

During an investor's conference call Thursday morning, CEO Christopher O'Donnell listed many signs of stabilization, including gains at the company's Arizona, California, Nevada and Michigan locations that were among the first to show declines at the onset of the recession. Customer traffic and corporate catering numbers are also growing, O'Donnell said.

The quarter's results were respectable given the difficult environment, Feltl analyst Mark Smith wrote in a research report.

Molly Young • 612-673-4376