CARLSBAD Calif. Rubio’s Restaurants Inc., operator or franchisor of 106 namesake Baja-inspired restaurants, swung to a loss in the first quarter as increased costs and reduced guest traffic hurt the growing chain.
For the quarter ended March 30, Rubio’s recorded a net loss of $745,000, or 7 cents per share, compared with a year-ago profit of $196,000, or 2 cents per share. Revenue rose 2.9 percent to $42.2 million, aided by the opening of seven restaurants so far this year.
To help stem the net loss, Rubio’s said it evaluated its cost structure and reduced corporate support staff by 10 percent last month. The company also said it would continue to reduce labor and food costs, but did not identify specific initiatives.
Rubio’s said it took a charge in the first quarter for canceled plans to open four restaurants in Northern California, in areas that had been experiencing rapid growth but were hurt by the sub-prime lending crisis. That expense, coupled with pay for new senior executives and legal fees led to an 18.4-percent jump in general and administrative costs.
Slowed sales in the face of those higher costs also hurt the chain. Rubio’s posted a same-store sales drop of 3.3 percent for the first quarter. The company cited the “overall challenging environment,” but also said it was hurt by the chain’s particular exposure to higher gas prices and the weakened housing market within its core operating areas of Arizona, Nevada and parts of California.