Famous Dave's of America Inc.
) reported first quarter 2012 adjusted earnings of 12 cents per
share, missing the Zacks Consensus Estimate by 7 cents and the
prior-year quarter adjusted earnings by 4 cents. The earnings
exclude the closure costs of approximately one cent related to the
sale of a company-owned location in the reported quarter.
Famous Dave's, which owns, franchises and operates restaurants
in U.S., reported total revenue of $37.5 million, down 1.1% year
over year, due to decrease in same-store sales. Company-owned
restaurants sales remained flat year over year at $32.7 million.
Franchise royalty revenue climbed 8.7% year over year to $4.4
million, benefiting from unit growth.
Same-store sales for company-owned restaurants declined 1.6%
during the quarter compared with an upside of 3.0% in the year-ago
quarter. The downside in comparable sales was attributable to a
decrease in dine-in guest traffic.
Same-store sales at franchise-operated restaurants inched down
0.1% compared with flat growth in the first quarter of 2011.
As a percentage of restaurant sales, food and beverage costs
spiked 160 basis points to 31.1% and labor and benefit expense
expanded 130 basis points to 33.2%, partially offset by a dip of 40
bps in operating expense to 29.3%. As a percentage of total
revenue, general and administrative expense jumped 20 bps to 11.9%
and depreciation and amortization expense remained flat at 0.4%.
Hence, the company's operating margin contracted 150 basis points
During the quarter, the company opened one franchised
restaurant. The company sold two franchised and one
company-operated restaurant during the reported quarter.
At the end of the first quarter, the company operated 185
restaurants, including 53 company-owned restaurants and 132
Famous Dave's reported cash and cash equivalents of $1.7 million
and shareholders' equity of $33.4 million at the end of first
During the quarter, the company repurchased 148,000 shares at an
average price of $10.97, excluding commission.
In 2012, Famous Dave's expects to open up to 15 restaurants,
which includes 2 company-owned restaurants. Of the 2 company-owned
locations, one will come up in Winnipeg, Canada; thus marking the
company's first opening outside US.
The company also plans capital expenditure of $6.5 million for
the renovation and maintenance of existing restaurants along with
investment in various infrastructure projects.
As the economy is showing signs of improvement, we believe
Famous Dave's will likely generate improved earnings. In 2012, the
company will focus on mitigating the effect of price increases of
key items. However, estimates have not budged in the last 30 days,
indicating the absence of any near-term catalysts.The Zacks
Consensus Estimates for 2012 and 2013 are pegged at 82 cents and 93
One of Famous Dave's primary competitors,
Brinker International Inc.
) reported third quarter 2012 earnings of 60 cents per share
surpassing the Zacks Consensus Estimate of 56 cents, driven by
higher restaurant margin and traffic growth.
The company has a Zacks #4 Rank, which implies a short-term Sell
rating on the stock. We also reiterate our long-term Neutral
FAMOUS DAVES (
): Free Stock Analysis Report
BRINKER INTL (
): Free Stock Analysis Report
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