Luby's Inc. swung to a profit in the fourth quarter from a year-ago loss, aided by increased sales from its acquisition of the Fuddruckers gourmet burger chain.
For the quarter ended Aug. 25, Luby's reported net income of $516,000, or 2 cents per share. That compares with a loss of $23.3 million, or 83 cents per share, in last year's fourth quarter, when the company booked heavy impairment charges related to the closure of 25 underperforming stores.
Revenue in the latest quarter rose 8.9 percent to $81.6 million from about $75 million. Luby's $61 million purchase of Fuddruckers in a bankruptcy auction closed in July, and the one-month contribution of corporate Fuddruckers offset a $400,000 decline in sales at Luby’s, the company said.
Same-store sales at Luby's cafeteria chain decreased 0.5 percent in the fourth quarter, as increased traffic from promotions and new breakfast openings were offset by reduced check averages, the company said.
“Each restaurant is creating limited-time offers specific to their trade area and our customers are responding," Chris Pappas, Luby’s president and chief executive, said in a statement.
“They are also reacting positively to our new breakfast offering,” he added. “During the quarter we ramped up the locations serving breakfast from 32 locations at the beginning of the quarter to 48 by the end of the quarter.”
However, chief financial officer Scott Gray noted in a conference call Thursday with analysts that “we clearly have more work to do to return the restaurant volume we lost over the past two years.”
Revenue from Luby’s culinary contract division rose 6.2 percent to $4.2 million in the fourth quarter, compared with $4 million in the prior-year quarter. The contract division’s facilities rose from 15 last year to 18 in the fourth quarter, Luby's said.
Houston-based Luby's Inc. operates 96 Luby’s restaurants and owns 56 Fuddruckers and franchises 130. The company also has three Koo Koo Roo restaurants in Southern California.
Contact Ron Ruggless at [email protected].
