Cafeteria sales slip, but Luby’s narrows loss
Luby’s reported a firstquarter loss Friday with declines in its namesake cafeteria chain and its contract culinary services.
The Houston-based company lost $ 1.9 million, or about 7 cents per diluted share, during the quarter. That is an improvement from the $ 2.7 million loss, or 9 cents per share, reported during the first quarter a year earlier. Total restaurant sales rose 2.1 percent, to $ 113.5 million, the company said.
CEO Chris Pappas told investors that, given “current momentum,” he predicts positive income this year.
Fuddruckers, Cheeseburger in Paradise and the Luby’s/Fuddruckers combination restaurants each posted increases, while sales fell 0.3 percent at Luby’s Cafeterias.
Of the company’s 179 restaurants open nationally, 99 are cafeterias, 77 are Fuddruckers, eight are Cheeseburger in Paradise locations and one is a Bob Luby’s Seafood Grill.
Asked during the conference call why the company continues to invest in cafeterias, Chief Financial Officer Scott Gray responded that “a number” of cafeterias are profitable on a unit-by-unit basis. The company is confident in the cafeteria model and the company offers a good mix across its brands from cafeterias that include
healthy eating options to burger restaurants, he said.
“We feel that business segment is very much a part of what our company is based on and the stability of the company,” Gray said.
Pappas said the company continues to look for opportunities to add combination restaurants in new Southern markets.
Revenue from culinary services fell 16.8 percent to about $4.9 million. Gray cited the loss of some contracts with higher-volume locations.
The company now has
Pappas said the company continues to look for opportunities to add combination restaurants in new Southern markets.
28 culinary services contract locations, five of them new. The company is in discussions with “a large hospital operator” to provide services across the country, Pappas said.
Luby’s continues to open restaurants and franchises.
Two Fuddruckers opened during the quarter. Six Fuddruckers franchises opened, including locations in Colombia, Italy and Mexico. There are 111 Fuddruckers franchises in the U.S. and abroad.
Quarterly franchise revenue was $2.1 million, which was relatively flat compared with the same period last year. Six more franchises are scheduled to open in 2016, Pappas said.
The company ended the quarter with $35 million in outstanding debt, down $2.5 million. Luby’s shares closed at $4.20 on Friday, up 2 cents.