Steak n Shake posts profit, rise in customer traffic

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.
 

Please enable JavaScript to view this content.

Story Continues Below

Editor's note: IBJ is now using a new comment system. Your Disqus account will no longer work on the IBJ site. Instead, you can leave a comment on stories by signing in to your IBJ account. If you have not registered, please sign up for a free account now. Past comments are not currently showing up on stories, but they will be added in the coming weeks. Please note our updated comment policy that will govern how comments are moderated.