Famous Dave's of America Inc.
) recently reported first-quarter 2013 earnings of 1 cent per
share, missing the Zacks Consensus Estimate of 14 cents per share
by 92.9% and the comparable prior-year quarter's earnings by
90.9%. The weaker top-line, higher general and administrative
expenses and time shift of Easter are the reasons for the
In the first quarter, Famous Dave's, which owns, franchises
and operates full-service and counter-service restaurants in the
U.S., reported total revenues of $36.6 million, down 2.4% year
over year and also below the Zacks Consensus Estimate of $38
million by 3.7%. Revenues in the quarter were mostly affected by
the lower traffic at its company-operated and franchised
restaurants due to unfavorable weather and volatile
Restaurant sales dropped 1.3% year over year to $32.3 million
owing to a 1.8% decline in comps at company-operated restaurants,
bad weather condition and weak industry sales. Franchise fee
revenues at Famous Dave's was $44 million, down 74.1% year over
year with the fall in comps at franchise-operated
Franchise royalty revenues also slid 6.5% year over year to
$4.1 million, owing to a 6.1% decline in comps at
franchise-operated restaurants. However, higher sales volume
generated at two new franchise units positively impacted the
company's franchise royalty revenues.
In the first quarter, Famous Dave's' operating margin shrank
300 basis points (bps) to 1.0% as its labor and benefit expense,
operating expense and general and administrative expense went up
10 bps, 50 bps and 180 bps to 33.3%, 27.8% and 13.7%,
During the quarter, Famous Dave's shut down a franchised
restaurant. At the end of first quarter, the company operated 187
restaurants, including 53 company-owned and 134
franchise-operated restaurants across 34 states in the U.S. and
one province in Canada.
Amid such sluggish sales environment, Famous Dave's is
intending to launch new initiatives to boost its sales. In
addition, the company is also expected to undertake proper
cost-control measures to drive its margin. In 2013, Famous Dave's
expects to launch new restaurants in 12 places.
A continuous decline in earnings, revenues, comps as well as
the margins over the past two months has put Famous Dave's a step
behind this earnings season. Moreover, a tepid macroeconomic
outlook and increasing competition have added to the woes.
However, this Zacks Rank #4 (Sell) company's initiative to
focus on key areas such as sales growth, menu as well as
restaurant format innovation, excellence in core systems to cost
saving strategy might help to improve the scenario, going
Brinker International Inc.
) first-quarter 2013 earnings beat the Zacks Consensus Estimate
but its revenues failed to meet the same.
Some other restaurateurs that are worth a look at this point
Bloomin' Brands, Inc.
Buffalo Wild Wings Inc.
) both carrying a Zacks Rank #2 (Buy).
BLOOMIN BRANDS (BLMN): Free Stock Analysis
BUFFALO WLD WNG (BWLD): Free Stock Analysis
FAMOUS DAVES (DAVE): Free Stock Analysis
BRINKER INTL (EAT): Free Stock Analysis
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