Although Famous Dave's did have an 11.5% revenue growth from 2007 to 2008, the firm has had slower sales in Q209. The beginning of summer is a key seasonal period for DAVE, as college and high school graduation parties have typically included Famous Dave's barbecue food.
Famous Dave's operates in one business segment: Foodservice. Within the Foodservice segment, Dave's offers its barbecue food to both casual dining and catering business. While Dave's menu is dominated by barbecued meats and poultry, the menu also offers fish, soup, and salads to less-carniverous customers.
In the past five years, United States consumers have become more conscious of unhealthy eating habits -- turning to low-calorie food. Famous Dave's menu, filled with belly-filling baby back ribs, hamburgers, and steaks, can be seen as a high-calorie meal.
In response to eating style changes, Famous Dave's has evolved its menu to include less-fattening items such as salads, soups, and fish.
Since Famous Dave's specialty is barbecued meats, the firm's operating margins are conditional upon fluctuating cattle prices. Rising lean hog, pork bellies, and live cattle prices cause DAVE operating costs to go up, which will reduce profits. From Q12008 to Q12009, pork bellies prices decreased 40% live cattle prices decreased 20%, and lean hog prices decreased 30% which in turn caused DAVE operating margins to increase 2%.
|Competition||Famous Dave's of America (DAVE)||Buffalo Wild Wings (BWLD)||Red Robin Gourmet Burgers (RRGB)||Ruby Tuesday (RT)||Texas Roadhouse (TXRH)|
|Net Income $Mil||0.4||24.4||27.1||(17.4)||38.2|
|Net Profit Margin %||0.62||5.78||2.68||-1.44||4.33|
|Number of Franchised Restaurants||123||363||129||224||69|
|Number of Company-Owned Restaurants||47||197||294||721||245|
|Sales per Restaurant $Mil||2.6||1.93||3.23||1.87||3.82|