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Famous Dave’s stock plunges after earnings

The company reported its second-straight profitable quarter.
Photograph by Jonathan Maze

Famous Dave’s stock price fell 9% in morning trading Tuesday despite reporting its second-straight quarterly profit.

The company said that its net income was $1.4 million, or 16 cents per share, in the quarter ended July 2. That was up from a loss of $1.3 million per share in the same period a year before.

But same-store sales at the Minneapolis-based barbecue chain declined by 1.6%, including a 1.9% decline at franchisee-owned locations. Franchisees operate all but 15 of the chain’s 150 locations.

Company-operated restaurants’ same-store sales rose 1.2%, despite the closure of some restaurants in April due to weather. CEO Jeff Crivello said the company plans to implement a number of improvements it debuted at one of the chain’s suburban Minneapolis locations earlier this year.

The company also hopes to bolster its catering sales with several initiatives, though catering sales “continued to be a challenge,” Crivello said. The company is also planning a drive-thru concept.

Famous Dave’s stock had more than doubled over the past year, as the chain works to recover from steep same-store sales losses that led to closed locations and a revolving door in the CEO’s office.

But after the decline on Tuesday, the stock is down 25% since April. The company’s stock bounced since the earnings report—initially soaring more than 8% in after-hours trading on Monday before reversing course and falling.

The company has closed a number of money-losing locations and refranchised some others, which along with some cost cuts and other efforts have helped improve the chain’s profitability.

UPDATE: This story has been updated to reflect a change in share price.

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