Declining sales and customer traffic drove Indianapolis-based Steak n Shake to its third straight quarter of losses.
The restaurant chain experienced a loss of $992,000 for the first quarter ended March 31, compared with a profit of $3.4 million during the first quarter of 2017, according to a financial report released Friday by San Antonio, Texas-based Biglari Holdings Inc., the parent of Steak n Shake.
Steak n Shake had enjoyed years of growth until the third quarter of 2017, when it suffered a quarterly loss of $3.3 million. It was the company’s first quarterly loss since Biglari acquired the chain in 2008 and boosted sales by rolling out a discount pricing strategy that includes $4 meals.
The chain followed that up with a $607,000 loss in last year's fourth quarter.
In the latest quarter, revenue was $190.3 million, down from $192.7 million a year earlier. Customer traffic declined 7.2 percent compared with the first quarter of 2017.
Those declines are on top of customer traffic declines of 4.4 percent for the full year 2017 and 1.2 percent in 2016—the equivalent of losing 7 million customers over two years.
Also during the first quarter, Steak n Shake’s same-store sales declined 1.7 percent.
Same-store sales have been declining since 2016, when the company suffered its first annual drop in that category since 2008.
Under Biglari, Steak n Shake put together 29 straight quarters of same-store sales increases, a streak that lasted from 2009 to 2016.
Same-store sales, also sometimes called existing-store sales, is considered an important performance metric in the restaurant industry. Steak n Shake defines same-store sales as sales from locations that have been open for at least 18 months.
Steak n Shake’s 616 restaurants are part of Biglari Holdings’ restaurant group, which also includes 62 Western Sizzlin restaurants. The Steak n Shake chain consists of 415 company-owned and 201 franchised locations.
Biglari’s holdings also include truck insurer First Guard, men’s magazine Maxim and a stake in Cracker Barrel. Steak n Shake accounts for almost 95 percent of Biglari Holdings' revenue.