Jeff Crivello, CEO of the parent company of Famous Dave's, can see the light at the end of tunnel. But first, the company needs to get through the winter, as the coronavirus has started to spread at a higher rate.
BBQ Holdings, which also owns Granite City Food & Brewery, saw business pick up over the summer, similar to many of Minnesota's other public companies.
As Famous Dave's shifted to much more takeout business, the company rang up higher-than-expected sales in the quarter that ended Sept. 27.
"We're encouraged by our teams' efforts to adapt and evolve, shifting our business model to ghost kitchen concepts and more off-premise," Crivello said.
Total revenue for the third quarter was $35.5 million with earnings per share of 4 cents, beating analysts' expectations for both measures. While both revenue and earnings rose from last year, the increases were due to BBQ Holdings' purchase of the Granite City chain and other acquisitions.
Famous Dave's same-store net sales for company-owned stores decreased 4.6% over third-quarter 2019, but saw a slight increase in October. Franchise-owned stores saw a decline of 10%.
Granite City, which BBQ Holdings purchased early this year, experienced a 26% loss in same-store sales. Crivello said Granite City's lackluster performance stems from not moving as quickly as Famous Dave's to off-premise dining.
Granite City's model with two large private dining rooms per location makes the shift harder, but the company is adding six Famous Dave's ghost kitchens in six of 18 Granite City locations by March.
The first test of the concept is performing very well at a Granite City in St. Cloud, Crivello said.
During the quarter, the company signed a 25-unit development deal with Bluestone Hospitality Group to open Famous Dave's ghost kitchens and dual restaurant concepts with the Johnny Carino's Italian brand.
The Coon Rapids location, which became a trial balloon for new menu concepts, was closed after the company sold it to a developer for $3.6 million. Plans are in place to replace the 5,600-square-foot former location with one about half its size, owned by franchisers Julie Wright, sister to former Famous Dave's CEO Adam Wright, and John Glockner.
Earnings were released late Tuesday. BBQ Holdings shares lost 21 cents Thursday to close at $4.50. They are down 10% year-to-date.
Early in the coronavirus pandemic, BBQ Holdings received $7.2 million for Famous Dave's and $5.8 million for Granite City in Paycheck Protection Program money. A second round of stimulus dollars is far from imminent, but Crivello said he thinks it should be passed.
"We're not the one choosing to close dining rooms," he said. "I feel very strongly that since governments are forcing us to do so they should be reimbursing us for this disruption."