Various experiments aimed at improving foot traffic at Famous Dave's of America Inc. appear to be paying off. The casual-dining chain swung to a profit of $998,000 for the first quarter ended April 1, compared with a net loss of $1.4 million the previous year.
The Minnetonka, Minn.-based operator has launched several trial initiatives aimed at increasing frequency among loyal and new diners.
Of the chain’s 152 restaurants, 136 are franchised. However, many of the experiments are being implemented at corporate locations, including partnerships with third-party delivery providers.
That explains the stronger comps at company-owned units.
Systemwide same-store sales decreased 0.9 percent, compared with a drop of 4.5 percent the previous year. Company-owned same-store sales increased 5.2 percent, with traffic rising 5.3 percent. Franchised units, which represent most of Famous Dave’s restaurants, reported a drop of 1.6 percent, compared with a decrease of 4.8 percent the previous year.
The company did not host a conference call to discuss earnings released Monday.
However, in a recent interview with Nation’s Restaurant News, CEO Jeff Crivello said the company is in the early stages of a multi-pronged recovery plan.
Crivello, who was named CEO late last year, said delivery shows the biggest opportunity for revenue growth. Delivery, which launched last year at corporate stores, also is a vehicle for introducing younger consumers to the brand as orders tend to “skew younger.”
Today, 31 percent of the company’s total sales come from off-premise sales, which includes online orders and third-party delivery, up 10 percent from a year ago.
“We believe the continued adoption of third party delivery will help drive the top line performance of our franchisees throughout the year as only half of the serviceable units are currently live,” Crivello said in a statement released Monday.
The company is also testing 23 new menu items at a remodeled restaurant in Coon Rapids, Minn., and a value menu on the East Coast.
For the quarter, revenue dropped 24.2 percent, to $12.8 million. The decrease was primarily tied to sales revenue lost from the closure of 12 company-owned restaurants.
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