QUOTE AND NEWS
Benzinga  Aug 15  Comment 
Shares of Famous Dave's of America, Inc. (NASDAQ: DAVE) are being clobbered after a Q2 earnings miss. The restaurant operator reported Q2 adjusted EPS $0.17 versus estimates for $0.12. Sales were $28.04 million versus estimates for $28.72...
Benzinga  May 17  Comment 
LendingClub Corp (NYSE: LC) shares reached a new 52-week low of $3.488 after the company confirmed in a regulatory filing that it received a grand jury subpoena from the U.S. Department of Justice. Payment Data Systems, Inc. (NASDAQ: PYDS)...




 
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Business Financials

Although Famous Dave's did have an 11.5% revenue growth from 2007 to 2008, the firm has had slower sales in Q209.[1] 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.[1]

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.[2]

Trends and Forces

Recession

Obesity Awareness

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,[2] 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.

Changing Cattle Prices.

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%[3] live cattle prices decreased 20%,[4] and lean hog prices decreased 30%[5] which in turn caused DAVE operating margins to increase 2%.

Competition

Competition Famous Dave's of America (DAVE) Buffalo Wild Wings (BWLD) Red Robin Gourmet Burgers (RRGB) Ruby Tuesday (RT) Texas Roadhouse (TXRH)
Revenue $Mil 140.4 422.4 869.2 1,248.6 880.5
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

References

  1. 1.0 1.1 Minneapolis Post, "Grad Parties Aren't Cooking Up the Sales Famous Dave's Expected," 07/01/09
  2. 2.0 2.1 Famous Dave's Website, "Menu"
  3. Trading Charts, "Pork Bellies"
  4. Trading Charts, "Live Cattle"
  5. Trading Charts, "Lean Hogs"
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