BBQ Holdings profit sinks as Famous Dave's unit purchasing rises

BBQ Holdings Inc., parent of the Famous Dave's restaurant chain, said its third-quarter profit fell sharply as it continued purchasing locations from franchisees.

The company's growing emphasis on to-go and catering services produced sales growth at comparable locations, however. And its franchisees, who still own three-fourths of Famous Dave's 128 outlets, also reported comparable sales growth.

Jeff Crivello, the company's chief executive, said the performance reflected "the investment and resources we have committed to reviving the Famous Dave's brand."

The company earned $17,000 during the three months ended Sept. 29. Adjusted for one-time expenses and gains, the company earned $168,000, or 2 cents a share.

A year ago, the firm had a net profit of $1.4 million and adjusted profit of $1.5 million, or 16 cents a share.

Revenue in the latest period was $23.7 million, up nearly 70% from a year ago. That reflects, in part, the larger number of Famous Dave's locations that the Minnetonka-based firm directly owns.

After developing a new menu and look for Famous Dave's locations, BBQ Holdings under Crivello embarked on a drive to close poorly performing locations and purchase others from franchisees.

In the process, Famous Dave's has seen sales grow more consistently. The quarter marked the eighth out of the last nine that Famous Dave's saw comparable-unit revenue gains. But franchisee-owned locations saw a bigger jump of 2.1% in comparable revenue than the company-owned locations, which grew 0.4%.

Overall, the growth in comparable sales was shaped by a nearly 1.5% jump in to-go orders and a 3% drop in dine-in orders.

The company before the end of the year will open a new location in Uptown with a design that creates more space for to-go orders and single-person diners. The company this summer closed a location in Calhoun Square after failing to come to terms with the shopping center's owners about changes to it.