Steak 'n Shake (NYSE:SNS), the chain behind those tempting steakburgers and hand-dipped shakes, has been serving up some good earnings. Last night wasn't any different as the company saw earnings rise, comps soar, and had little choice but to raise its full-year profit guidance.
For the quarter, Steak 'n Shake earned $0.29 a share -- a 16% spurt from last year -- on a healthy 8.7% spike in same-unit sales at its company-owned restaurants. On the one hand, that may be what you'd expect given that burger giant McDonald's (NYSE:MCD) produced a 9.4% surge in its March quarter.
But leave that one hand -- and you might as well use it to wipe some of that Steak 'n Shake chili off your chin -- and you realize that the fast food revival could have come at Steak 'n Shake's expense. After all, Wendy's (NYSE:WEN), Checkers (NASDAQ:CHKR), and Jack in the Box (NYSE:JBX) are all sprucing up their burgers and putting out mean salads, precisely the sweet spot Steak 'n Shake has been milking for generations.
But the Indianapolis-based company's clever marketing has helped educate consumers on the differences. With ads featuring actual ketchup bottles, shattering china plates, pickles sliced the long way, and poking fun at the cattle-call culture of its counter-service rivals, Steak 'n Shake has managed to keep customers coming back.
Management is now looking to earn between $1 and $1.04 a share this year. That's two copper pennies higher than its original public forecast. And so continues an impressive turnaround. You may recall that earnings dipped in 2001 and didn't fare much better a year later, but the company is in a groove now.
Yes, these are health-conscious times, and yet the junk food havens are thriving. "We know," Bob Bobala pointed out earlier this week, all about the evils of fatty grub. "We know and we probably don't much care." A chance to pick up shares of Steak 'n Shake at a P/E multiple in the teens? Now that is something to care about.
Know the difference between a steakburger and a hamburger, and have already wolfed down both today? Do you think you need to cut back on the junk food? What are some ways to make the trip to your fast food eatery work without packing on some extra weight? All this and more -- in the Fools Fighting Fat discussion board. Only on Fool.com.
Longtime Fool contributor Rick Munarriz can use a good steakburger with those oh-so-thin fries about now. He does not own shares in any of the companies mentioned in this story.
