Famous Dave's of America said Monday it earned nearly $1 million in the first three months of the year, a sharp turnaround from a year ago that was helped by a jump in comparable sales at its company-owned restaurants.
The performance at the Minnetonka-based barbecue chain has been uneven amid a revolving door of leaders and strategies, far outpaced investor expectations. The company's shares rose 8 percent in after-hours trading following the news, which came after regular trading had ended for the day.
The $998,000 profit at Famous Dave's amounted to 13 cents a share, beating analysts' forecasts for a profit of 7 cents a share.
Revenue fell 24.2 percent to $12.8 million, reflecting the closing of 19 company-owned restaurants in the past year.
But comparable sales, those at restaurant locations open at least a year, were up 5.2 percent. Comparable sales at franchisee-owned restaurants fell 1.6 percent. Both numbers were better than a year ago.
"We saw many of our previously announced initiatives come to fruition in the first-quarter fiscal 2018 as we returned to profitability," Chief Executive Jeff Crivello said.
Besides adding 23 menu items in Coon Rapids only as a test and completing a redesign there, the company has also expanded third-party delivery service at roughly half of its locations. Nearly one-third of Famous Dave's sales are for food that is consumed outside of the restaurants.
Crivello hopes to continually expand delivery to more franchisees as they hear about the success that the corporate-owned stores have experienced with delivery. "Millennials are big delivery customers," said Crivello. "We want to broaden our demographic."
Besides attracting a younger audience, the new menu in Coon Rapids is meant to appeal more to women, who are less likely to be fans of barbecue. Cranberry glazed chicken, pastrami and new sides, such as Brussels sprouts, have been hits on the new menu.
Famous Dave's owns 16 corporate locations, mostly in the Twin Cities. Franchisees own and operate another 136 Famous Dave's in 33 states, Puerto Rico, Canada and the United Arab Emirates.