Biglari Holdings Inc.

Second-quarter total revenues were $190.5 million, down 5.8% from $202.2 million a year ago. Same-store sales declined 6.3%, driven by an 8.8% drop in guest counts partly offset by a 2.5% increase in average guest expenditure; average guest spend reflected a 4.0% weighted average menu price increase and a 1.5% coupon impact. Cost of sales were $47.4 million, or 25.1% of net sales, versus $46.2 million, or 23.0% last year; restaurant operating costs were $104.0 million, or 55.0% of net sales, versus $101.8 million, or 50.6%. G&A was $14.4 million, or 7.5% of revenue, versus $17.6 million, or 8.7%; marketing was $10.4 million, or 5.4%, versus $9.1 million, or 4.5%. Net loss was $2.8 million, or $0.10 per diluted share, compared with net income of $6.0 million, or $0.21 per diluted share. The company generated $13.9 million of cash from operations. Management did not give formal next-quarter or full-year revenue/EPS guidance, but said promotions will continue through the balance of the fiscal year, new unit development is suspended, and the company is on track to reduce G&A by at least $8.1 million for the year.

Wayne Kelley said the company remains optimistic it can conclude the CEO search in the near future and emphasized that the board is considering both internal and external candidates, with a heavy emphasis on restaurant operating experience. In his broader comments, he said management remains intensely committed to reversing negative same-store sales and is encouraged by promotions, personalized service, and other initiatives. His tone was defensive but confident about the brand’s long-term future.

Jeff Blade said the quarter reflected sequential improvement but results remained unacceptable, and laid out an operating plan focused on value promotions, service, unit review, and cost savings. He cited the 6.3% comp decline, $190.5 million in revenue, $2.8 million net loss, $13.9 million in operating cash flow, and noted that cost pressures came from commodities, wage/benefit inflation, discounting, and fixed-cost deleverage. He also said G&A savings of at least $8.1 million are on track, maintenance capex typically runs $6 million to $8 million annually, and the company continues to evaluate sale-leasebacks and underperforming real estate.

Analysts pressed on underperforming units, breakfast, the CEO search, discounting, and capital allocation. Management said weak stores are reviewed for turnaround, franchising, or closure depending on location, profitability, and cannibalization; breakfast is still small at 8% of sales and was intentionally launched without cannibalizing steakburgers and milkshakes; and the CEO search has been active since February, with both internal and external candidates under review. On promotions, management said the deeper discounts are meant to balance traffic support with brand protection, and that the $2.99 offer was break-even to slightly positive.