INDIANAPOLIS The Steak n Shake Co., which operates or franchises 485 family-dining restaurants, reported this week its third consecutive quarter of profitability, on a same-store sales increase driven by a 20-percent surge in traffic.
For the quarter ended Sept. 30, Steak n Shake said its same-store sales rose 10 percent from the same quarter a year ago. The surge helped revenue rise 15 percent to $160 million. The company’s net income totaled $3.4 million, or 12 cents per share, compared with a loss of $9.2 million, or 32 cents per share, in the same quarter a year earlier.
Closing the company’s fiscal year, the fourth quarter provided Steak n Shake with a reversal of slowed sales trends and mounting losses the company had booked for years.
In the annual letter to shareholders, chairman Sardar Biglari said 2009 was a great year for Steak n Shake, which focused on cutting costs, developing value for customers and improving service.
“If fiscal 2008 was annus horribilis, and it was truly horrible, then, by contrast, fiscal 2009 was annus mirabilis, or a miraculous year,” Biglari stated in his letter, which can be found here. “2009 was a year marked by the reversal of the decline in customer traffic that had been troubling Steak n Shake over most of the last decade as well as a welcome reversal of operating losses that started in late fiscal 2007.”
He noted, however, that Steak n Shake “will never rest on our laurels.”
For the full year ended in September, the company posted net income of $6.0 million, or 21 per share, versus a year-earlier net loss of $23.0 million, or 81 per share. Fiscal 2009 revenue rose 3 percent to $627 million.
Steak n Shake also announced a 1-for-20 reverse stock spit, effective at market close on Dec. 18, reducing the number of outstanding common shares to 1.4 million from the current 28.8 million. The reverse split comes in advance of a planned merger with Western Sizzlin Corp., a company that, like Steak n Shake, is led by former shareholder activist investor Biglari.
The companies jointly announced in October their intention to merge, with Steak n Shake becoming a subsidiary to Western Sizzlin.
Contact Bret Thorn at [email protected].