(Continued from page 1)

For fiscal 2013, while revenue and same-store sales at company-owned restaurants were relatively flat for the full year, restaurant-level profit margins improved 2.5 percent and net income rose 9.1 percent to $4.8 million.

Because Famous Dave’s is breaking in an interim chief executive, CFO Purcel did not provide the standard guidance for several financial metrics for 2014, but she said the company would provide an updated outlook when it reports first-quarter results.

“We have a menu evolution that will happen in April, and we still need to have some internal conversations as to what pricing looks like for the year,” she said. “I will tell you that in this environment, we’re going to be very sensitive about taking price.”

The delay in annual guidance also would let Famous Dave’s gauge the exact impact that severe winter weather in most of its major markets has had on sales so far in 2014, she said. “Every other casual-dining concept is being impacted by weather, and we’re not unusual,” she said. “While I can’t quantify it, I can tell you that, certainly, we have been hit in our core markets. From a weather perspective, we had restaurants where there were partial closures and some that had full closures.”

Weather had some impact on the 2.6-percent decrease in same-store sales at company-owned restaurants in the fourth quarter of 2013, Purcel added, but so did rolling over a direct-mail campaign conducted in the fourth quarter of 2012, “which we purposefully made the decision to work ourselves out of.”

The direct-mail promotion positively impacted sales in the fourth quarter of 2012, yet it wasn’t profitable Purcel noted.

“Now we’re still testing direct mail and still feel that it has a role, just not to the extent it did,” she said. “One of the ways that we redirected our marketing spend was utilizing our P.I.G. Club database. We have almost 2 million names across the system and really leverage that database to drive traffic into the stores. … While we had negative sales on the top line, I really believe that we had enhanced profitability, redeploying our marketing in that fashion.”

Famous Dave’s also chose not to repeat a radio campaign from 2012 that did not produce the intended sales results. However, it did have more success with TV advertising in 2013.

“We did see a nice lift off television when it’s attached to product news,” Purcel said. “Dean mentioned a terrific promotion with regard to our Burnt Ends and felt that the success of that and the line extensions were really enhanced by partnering that with media. So we’re revisiting all those strategies as we go into 2014.”

Famous Dave’s operates 54 company-owned stores and franchises another 142 locations in 34 states, Puerto Rico and Canada.

Contact Mark Brandau at mark.brandau@penton.com.
Follow him on Twitter: @Mark_from_NRN