While seeking sale, company restores some operations after coronavirus closures
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Luby’s Inc., the parent to the Luby’s Cafeteria and Fuddruckers hamburger chains that is seeking a sale of part or all of the company, has closed 16 units in this fiscal year and is gradually restoring some operations after coronavirus restrictions, the company reported Monday.
The Houston-based company, in releasing third-quarter earnings, said it had closed three of its Fuddruckers units and 13 of its Luby’s Cafeterias so far in the first three quarters of the fiscal year.
The company ended the third quarter on June 3 with 108 restaurants, including 76 cafeterias, 31 Fuddruckers and one Cheeseburger in Paradise, though many remained closed because of the COVID-19 pandemic.
On June 3, Luby’s said its board was seeking a sale of its operating divisions, real estate, and/or the company as a whole. It said many restaurants would remain open during the process.
The publicly traded company had been seeking strategic alternatives since last September.
Luby’s said it began reopening dining rooms in May as state and local governments eased closure mandates aimed at stemming the spread of the novel coronavirus.
As of June 3, the company had opened 31 Luby’s Cafeterias and combo Luby’s-Fuddruckers locations, as well as eight Fuddruckers units, with limited capacity. Franchisees had opened 59 Fuddruckers locations by the same date.
“We are continuing a gradual reopening of our restaurants and as of the date of this release there were 46 stand-alone Luby’s Cafeterias and combo locations and 17 Fuddruckers restaurants operating with dining rooms open at limited capacity, and there were 64 franchise locations in operation,” Luby’s said Monday.
In the fiscal third quarter, operating stores were achieving weekly sales levels of more than 80% of prior-year levels at the cafeteria brand and in excess of 70% at the Fuddruckers brand, the company said.
About 40% of restaurant sales were for off-premise dining, such as food-to-go and delivery.
“At these sales levels and with a redefined operating model, we are generating positive store-level profit, in the aggregate, at these 46 cafeteria and 18 Fuddruckers locations,” the company said.
For the third quarter ended June 3, Luby’s net loss widened to $25 million, or 82 cents a share, from $5.3 million, or 18 cents a share, in the same period a year ago. Sales declined to $19 million from $74.8 million in the prior-year quarter.
In addition to restaurants and cafeterias, Luby’s has a culinary contract services division that provides foodservice management to healthcare, corporate-dining and sports locations.
Contact Ron Ruggless at [email protected]
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