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Steak n Shake posts profit, rise in customer traffic

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Steak n Shake Co. late yesterday reported strong profit and big increases in customer traffic and same-store sales for its fiscal third quarter, which ended July 1.

The Indianapolis-based burger chain reported a profit of $3.8 million, or 13 cents per share, in the quarter, compared with a loss of $9.8 million, or 35 cents per share, during the same time frame a year ago.

Analysts had expected the company to post a profit of 6 cents per share.

Revenue in the quarter increased 1.4 percent, to $146.3 million.

Steak n Shake's customer traffic rose 13.4 percent and same-store sales jumped 5 percent in the quarter compared with the same period of 2008, the company said.

The rise in same-store sales doubled Steak n Shake's increase from the previous quarter, when same-store sales grew 2.4 percent, snapping a 14-quarter streak of declining same-store sales.

Steak n Shake classifies same-store sales as results from stores open at least 18 months.

Two consecutive quarters of positive numbers may reflect a turnaround for the struggling chain. It had reported same-store sales drops for three-and-a-half years.

The encouraging signs also may be the result of heavy discounting. The chain has rolled out several lower-priced menu items this year, including $2.89 Steakburger snack meals.

Sardar Biglari, chairman and CEO of Steak n Shake, disclosed in a prepared statement that the company may pursue investments in the form of acquisitions, joint ventures or partnerships that may or may not be related to its current operations.

Company shares were up 5.8 percent yesterday prior to the release of the company's quarterly earnings report, closing at $10.55 each.
 

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