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Steak n Shake thrown for loss

January 24, 2008

Indianapolis-based Steak n Shake Co. Inc. reported a $1.2 million loss in its first fiscal quarter after having shown a $4.2 million profit a year earlier.

The loss of 4 cents per share was greater than the 2-cent loss expected by analysts surveyed by Thomson Financial.

Revenue in the period ended Dec. 19 slipped 7.4 percent, to $136.4 million.

The company said the year-ago quarter benefited from a coupon program that hadn't been continued. Bad weather in December accounted for about a third of the 9.5-percent decline in same-store sales.

Further eroding results was a deteriorating economy, aggressive promotions by competitors and continuing problems with executing at the store level.

The company also said it would update shareholders at a later time on developments from a special committee it organized last year. The committee is working with Merrill Lynch & Co. to explore strategic alternatives.

Steak n Shake is under pressure from a prominent shareholder to take drastic action to push up the share price, which stands at $8.74. Sardar Biglari, of San Antonio, Texas, has been urging other shareholders to elect him and an associate, Phillip Cooley to the board.

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