After sales declined at a slower rate than a year ago, Famous Dave’s of America Inc. executives saw some hopeful signs in its latest results Monday.
“This is a pivotal time in Famous Dave’s history,” Chief Financial Officer Dexter Newman said, as he and other new executives begin the latest effort to revive the barbecue chain.
The company eked out a $44,000 profit in the three months that ended Oct. 2, reversing a loss of $71,000 a year ago. Revenue fell 8.5 percent to $25.5 million, decelerating from a 14 percent drop in the second quarter and 17 percent drop in the first three months of the year.
Mike Lister, chief executive for only five weeks and its fourth CEO in four years, said the financial results aren’t yet reflective of the efforts of a new management team. He described four initiatives, including improving sales and traffic, reducing costs, elevating organizational effectiveness and rebuilding the culture.
Same-store sales for locations open two years declined by 1 percent compared to a decrease of 9.1 percent in the same period a year ago. It was the best performance for corporate-owned stores in the past three years, Lister said.
The company plans to roll out a remodeling that has been implemented at its Maple Grove and Bloomington sites, but executives are waiting for more data to be sure the move justifies the expense. “The refresh is a much bigger investment than adding a menu item,” Lister said.
In the latest quarter, Famous Dave’s incurred $3.4 million in charges to write down the value of 11 corporate-owned restaurants. The company determined that the estimated market value of the assets was less than net book value. The impairment charge reduced the related assets to an estimated fair value. “It’s a way that we can cost-effectively get out of them,” Newman said.
The company has seen consumers responding to its redesigned lunch menu and its Wednesday Slowdown Lowdown promotions. Although marketing dollars are tight, the company has had good success with more modest marketing efforts such as $10 off a $40 purchase during last month’s Minnesota Vikings-New York Giants game.
The company operates 176 restaurants, including 37 corporate-owned and 139 franchised, with locations in 32 states, Puerto Rico, Canada and United Arab Emirates. Since last quarter three locations in Iowa, Wyoming and Michigan have closed.
The company’s stock closed at $5.15 on Monday before news of the results, which were released after trading hours.
Famous Dave shares are down about 40 percent over the past year and touched a 52-week low of $4.75 last week.