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MINNEAPOLIS-Famous Dave's of America Inc. on Wednesday said its second-quarter profit nearly doubled, topping Wall Street estimates and sending the company's shares sharply higher.
The company is on track to open from 25 to 30 restaurants this year, after having opening nine in the second quarter and five in the first quarter of this fiscal year, said David Goronkin, president and chief executive officer of Famous Dave's. "Next year's new restaurant growth will be similar to this year's," Goronkin said during an earnings call with securities analysts Thursday. He said he would likely comment further on next year's growth plans during the third quarter conference call.
The barbecue chain posted net income of $1.9 million, or 17 cents per diluted share, in the quarter ended July 3. That's up 91% from the same quarter a year ago, and it beat analysts' earnings expectations of 11 cents per share. Total revenue came in at $28.1 million in the second quarter, up 10.5% from the same period the previous year. Strong growth in franchise royalties and a 5% rise in comparable store sales at company-owned restaurants were the main reasons for the improvement.
During the quarter, Famous Dave's entered into five additional states, with new restaurants in Massachusetts, New York, Pennsylvania, Texas and Washington (state). The chain now had 118 restaurants at the end of the second quarter, including 38 company-owned restaurants and 80 franchise-operated restaurants in 29 states. In addition to the nine franchise-operated restaurant openings in the second quarter, the company also entered into area development agreements for 16 new restaurants in Connecticut (other than Fairfield County), central portions of Indiana, Maine, Western Massachusetts, Rhode Island and Vermont.
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