Famous Dave's Shares Rise On 1Q Profit Jump

NEW YORK (AP) — Shares of restaurant chain Famous Dave's of America Inc. rose Thursday after the company reported its first quarter profit jumped 58 percent.

Shares climbed $1.41, or 31.5 percent, to $5.88 in morning trading.

After the market closed Wednesday, Minneapolis-based Famous Dave's said net income rose to $1.3 million, or 15 cents per share, from $835,000, or 9 cents per share a year ago.

Revenue rose less than 1 percent to $33.8 million from $33.7 million.

Same-store sales, or sales at locations open for at least 24 months, for company-owned restaurants fell 5.5 percent.

The company said it was able to grow its profit largely by managing its costs well. Famous Dave's said its food costs dropped partly because it used shorter contracts to buy ingredients. Commodity prices have dipped recently so companies that bought their ingredients with shorter contracts may have been able to take advantage of the drop in prices.

A number of sit-down chains have reported higher profit in the first quarter by cutting costs even as sales continue to decline. Consumers, hurt by the recession, have continued to forgo a meal out at a sit-down chain in favor of fast-food or eating at home.