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Famous Dave's of America Inc. Message Board

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  • Would diversify their loss potential.

  • I hate it when pigs get slaughtered.

  • They need a Famous Dave's on the Strip !!

  • Now is the time for some stronger restaurant chain to make a hostile takeover. At this market cap, they won't even have to have a board meeting to approve it. This stock has been a total dog and Ed is not the savior some of you have suggested he would be.

    I think if they want to remain independent, they need to consider that late night strip club idea that was out here a few years back. Would create great margin bar revenues without an increase in fixed costs.

  • The answer is that Ed is not going to turn it around. He has now been there a year and the effects of the discounting that preceded him are gone. They have turned over all their Board members and all but one of the executives and are running with contractors as they try to get everyone left convinced to move to their new HQ in Chicago.
    Most of the employees are looking for jobs elsewhere and Ed has alienated the franchisees. He has no growth strategy and has cut all he can. Long tenured restaurant managers are bailing and food quality is not improving.

    Sentiment: Strong Sell

  • Revenue decreased to $34.1 million from $35.7 million, primarily reflecting a comparable sales decrease
    Comparable sales for Company-owned restaurants open 24 months or more decreased 4.0%
    Franchise royalty revenue of $4.0 million declined
    cash flow margins declined by 650 basis points primarily as a result of an increase in operating expenses.
    General and administrative expenses increased by approximately $1.0 million
    Net loss was $2.5 million compared to net income of $1.9 million for the fourth quarter
    net loss per share was $0.35 compared to net income per diluted share of $0.25

    Ed Rensi, CEO of Famous Dave's commented, "The Company's top line sales performed in line with our expectations for both the fourth quarter and fiscal 2014. We expect to continue to face top line sales headwinds until the middle of the second quarter of 2015."

    How is McDonalds doing? Someone please explain how in the world they are going to to turn this train wreck around. Reni appears to be making it worse. A lot worse. Luckily the stock is trading the complete opposite from the fundamentals. I guess based on the HOPE that Rensi is a genius.

  • Reply to

    Called The Manager In Appleton

    by appletonrocks Dec 31, 2014 5:51 PM

    Appleton is Joe McCathy territory but also hosts Lawrence University which is Wisconsin's answer to the Ivy League a real duality.

  • Time to freshen this up with the Australian Open on.

  • Reply to

    Birthday Meal

    by appletonrocks Jan 22, 2015 8:24 PM

    Combination causes major gastric challenges.

  • I can't decide between DAVE and Red Lobster. I might do both, why not. Maybe a rack for lunch and a crab souffle for dinner.

  • Reply to

    Called The Manager In Appleton

    by appletonrocks Dec 31, 2014 5:51 PM

    Appleton is a progressive community, although the current leadership of the city is sort of lame.

  • Reply to

    Richmond closings

    by casual_observer_27 Dec 31, 2014 9:38 AM

    You brought up commodity prices. Beef prices are through the roof. Almost doubling in price. How will DAVE pass through the rising food costs to customers? Margins should go down as hey are for all restaurants that serve meat. This is a basic fact and can be seen across the board.

    I agree with you that closing 10% of the stores and the worse performing ones is a necessary move. Those stores are losing money and a drag on earnings. However the number of stores Rensi has guided that he will close is roughly 70% of all the co. owned stores to bring the ratio of co. owned stores to franchised ones down to 15%.

    Basically they want out of the Co. owned store business and into the pure franchise business. Sounds like right out of the McDonalds playbook right? DAVEs is not McDonalds. And Rensi has a horrific track record outside of McDonalds with his recent complete failure with his burger chain.

    Further by closing so many co. owned restaurants DAVE should see a shrinkage in the size of the business by 30% - 50% over time with all the losses written off for closing all those stores. While that is the prudent thing to do, DAVE should have a valuation reflecting a shrinking business, not a growing one. It is not growing.

    Therefore a PE of single digits will be more appropriate and eventually you will see DAVE trading at $5 - $10 based on 5 - 10 PE ratio.

    Maybe one day DAVE can figure it out and come up with a new concept and menu and start growing again. At that time IF they can grow and make nice margins. Then DAVE might get a stock price reflecting a growth stock with earnings? Meanwhile DAVE goes down to $5 and in a couple years if DAVE can get back on track it grows? IMO.

  • Reply to

    Richmond closings

    by casual_observer_27 Dec 31, 2014 9:38 AM

    DAVE is closing the worst performing restaurants. This will make a difference because these 10% of stores account for more than 50% of the SSS decreases. You're saying that closing these stores is a bad thing? Management has a goal of a 15% margin and have a plan to get there which includes this action. I also believe the economy is improving and, along with low gas prices, will provide more discretionary spending including increase restaurant visits. Compared to first quarter of 2014 which had the polar vortex keeping people indoors, the 2015 first quarter will be a big improvement. Small stocks have also been the best performing sector for the 12 months prior to a Fed rate increase in the last 5 major long term bull markets and DAVE falls in this sector. I'm also predicting this company will be sold or go private within the next 3 years.

  • Reply to

    Called The Manager In Appleton

    by appletonrocks Dec 31, 2014 5:51 PM

    Been through Appleton once and my only memory was the big John Birch Society building. Felt like I had stepped back into the 50's. Couldn't believe that was still thriving after all these years.

  • He told me the strip club ideas for DAVE after hours, while creative, would be difficult to staff since many of their servers are young women. Said no way would he expose them to that.

  • Reply to

    Richmond closings

    by casual_observer_27 Dec 31, 2014 9:38 AM

    But they added that they will close 4 more co. owned stores for a total of 7.

    Plus taking what Rensi said on the conf call it would appear they will close almost all of their co. owned stores so that the mix is 90% franchised stores vs. 10% co. owned stores.

    By reducing the co. owned stores by 7 of the worst performers plus losing the one that burned down... That should bring revenues down significantly. Greater than 10%. However the same store sales and margins will improve slightly.By reducing stores DAVE is going backwards. Shrinking sales, not growing. While that is probably the prudent thing to do it makes clear that the chain concept is struggling.

    The valuation for a turnaround restaurant chain that is shrinking and trying to come up with a new concept that might save them? Maybe 3x earnings or $3 per share. Currently DAVE is at 30x earnings. Go figure. Makes no sense.

    IMO the reason for the highly inflated valuation is hedge funds and followers have bid up the shares based on Rensi's reputation as a restaurant pro. However while Rensi worked at the proven concept of McDonalds and did a good job there, his only foray into a new concept with his high end burger chain in Chicago was a complete bust. So the inflated value makes no sense especially since management has zero credibility, not making anything better, and if they ever figure out how to turn DAVE around it is obvious that things will get worse far before they get better.

    BTW. The next biggest BBQ chain that is a comp to DAVE is Smokey Bones. They almost filed BK and was sold to a PE firm giving the business zero value. Sold for the value of the RE. By that measure DAVE is worth very little.

  • DAVE trimming the low hanging fruit. Without these 3 locations, overall earnings would have been 4 cents higher for the year and same store sales would have been a half point higher. Obviously one of the underperforming markets which was mentioned in the last conference call. This will be a good move for DAVE in the long run. I have to admit I don't necessarily agree with closing the stores with no notification to the employees. They showed up to work with a sign on the door saying that they were no longer in business. It's another example of why employees hate to see hedge funds take over a business but investors love to see hedge funds take over a business. No nonsense approach to getting rid of the dead weight. In this case, I suspect the abrupt closing may also have to do with getting this asset impairment charge into 2014 rather than 2015. I personally like to be on the same side of hedge funds rather than betting against them. There are over 800,000 shares shorted which may get squeezed a bit if the restaurant sector heats up in 2015 like I predict it will.

    Sentiment: Strong Buy

  • News today. Closing 3 stores in Virginia plus another 4 stores on top of that for 7 total. Closing 7 company owned stores is a huge chunk of DAVE's business. Not a good sign.

    Rensi warned we will see more closings in the future. I guess they should close most of the co owned stores if they are to get to the ratio of 10% - 15% of co owned stores to franchised ones. But closing so many stores seems to be admission that the concept is flawed and is not working.

    Shrinking rather than growing is negative. The stock is trading at a ridiculous valuation if DAVE continues to shrink. It is trading with a growth stock valuation when clearly it is not growing.

    but at least perhaps by closing the worst of the bunch they can at least survive and figure out a new concept that works. Maybe chicken?

DAVE
28.79+0.59(+2.09%)May 1 4:00 PMEDT