HOUSTON Luby’s Inc., operator of 96 cafeterias and a contract feeding division serving 15 sites, said last week that consumer confidence and spending is not likely to improve next year, leading to continued softness in restaurant sales and a net loss for the company.
The Houston-based company has reported widening net losses for the past three quarters and in October closed 25 underperforming locations to help bolster its cash flow. Luby’s said the weak trends are likely to continue through its August-ending fiscal 2010.
“Any improvement in restaurant sales will lag the broader economic recovery that economists project to begin taking place in calendar year 2010,” the company said in a statement outlining its first-quarter results. “For Luby’s to see any material improvements in its same-store sales at its retail units, it will take a change in consumer confidence in its areas of operation. The company currently does not see any signs of improvement in that trend for the 2010 fiscal year.”
For its first quarter of 2010, which ended Nov. 18, Luby’s posted a net loss of $3.7 million, or 13 cents per share, versus a loss of $2.2 million, or 8 cents per share, in the same quarter a year earlier.
Latest-quarter revenue fell 14 percent to $51.7 million, and same-store sales fell 13.3 percent. The company noted that revenue for the culinary contract services division increased 9.7 percent to $3.3 million, mainly because of the addition of four new accounts.
“Our customers, faced with uncertainty, are spending their disposable income judiciously, seeking out value,” said Chris Pappas, Luby’s president and chief executive. “In order to meet their needs, we continued to provide an array of menu items at attractive price points, including the expansion of our Power Meals to include dinner as well as lunch.”
Losses from continuing operations more than doubled to $2.9 million, or 10 cents a share, from $1.3 million, or 5 cents a share, in the first quarter of fiscal 2009, Luby’s reported.
Al Liddle contributed to this report.
Contact Sarah Lockyer at [email protected].
