Highlights of the first quarter include: total revenues increased 10.5 percent to $126.5 million versus $114.5 million; same-store sales for company-owned restaurants increased 7.8 percent; net earnings increased 11.8 percent to $5.1 million versus $4.6 million; and diluted earnings per share were $0.18 compared to $0.17
Net sales for the fiscal first quarter 2005 grew 10.6 percent to $125.5 million compared to the same quarter last year. Same store sales for company-owned restaurants during the fiscal first quarter 2005 increased 7.8 percent, marking the eighth consecutive quarter that Steak n Shake has reported positive same store sales.
Net earnings for the fiscal first quarter 2005 were $5.1 million, or $0.18 per diluted share, compared to $4.6 million, or $0.17 per diluted share, in the prior year quarter.
”The company's limited-time holiday milk shakes helped drive another strong quarter of positive same store sales,” says Peter Dunn, Steak n Shake president and CEO commented, "While tomato, dairy, and beef costs were higher than last year, we were able to leverage our labor costs as a result of strong same store sales and better restaurant-level execution."
"In fiscal 2005, our primary goal is to focus on the fundamentals of the Virtuous Cycle which includes making critical investments in store level leadership and infrastructure,” says Dunn. “We believe this will lead to accelerated store expansion, and should support sustained earnings growth over the long-term."
As of December 22, 2004, there were 429 Steak n Shake restaurants operating in 19 states, including 368 company-owned restaurants and 61 franchised units. During the quarter, Steak n Shake opened three new restaurants in Indiana and Michigan and one franchised restaurant in Charlotte, North Carolina.
On November 5, 2004, Steak n Shake entered into an agreement to acquire Kelley Restaurants Inc, its largest franchisee, in a cash merger transaction for approximately $17.5 million, net of debt being assumed. Kelley Restaurants, Inc. was Steak n Shake's largest franchisee, operating 16 Steak n Shake restaurants in the Atlanta, Georgia and Charlotte, North Carolina markets. The transaction closed on December 29, 2004.
For the fiscal year 2005, Steak n Shake reaffirmed diluted earnings per share guidance in the range of $1.08-$1.11, inclusive of the Kelley Restaurants acquisition. Same store sales growth is expected to be between 2–3 percent. Steak n Shake also reiterated that it anticipates opening 18–24 new company-owned restaurants throughout fiscal year 2005 and at least 26 company-owned restaurants in fiscal year 2006.
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