LRI Holdings Inc., the parent company of Logan’s Roadhouse, said higher commodity costs and weakening traffic contributed to a steep drop in profits in the fourth quarter.
The steakhouse chain reported a 65.3-percent drop in net income to $1.7 million from $4.9 million in the same quarter last year.
For the quarter ended July 31, Logan’s revenue rose 7 percent to $151.5 million from $141.5 million in the year-ago period.
The chain reported that same-store sales for the quarter were flat, with a decline in customer traffic offset by a 2.9-percent hike in the average check.
Logan’s Roadhouse ended the quarter with 207 company-owned and 26 franchised restaurants in 23 states.
"We are pleased to have expanded both our revenues and adjusted EBITDA in fiscal 2011, despite a weak consumer environment and increasing commodity prices,” said Thomas Vogel, Logan’s Roadhouse chief executive. “On the top-line, we generated positive comparable-store sales for the year and also benefited from sales contributions from our new restaurant openings.
“Although higher cost of sales challenged our profitability at the restaurant level, we were able to mitigate the impact by realizing labor efficiencies and aggressively controlling other expenses,” he added. "We believe Logan's Roadhouse has a long runway of growth potential, and we intend to target expansion of our company unit base by approximately 10 percent annually, including 20 restaurants in fiscal 2012.”
Logan’s Roadhouse opened 15 company-owned restaurants in fiscal 2011, and overall net sales increased 6.4 percent to $590.9 million from $555.5 million the previous year.
Same-store sales rose 0.8 percent during the 12-month period, as a 2.6-percent increase in average check was partially offset by a 1.8-percent decline in customer traffic, the company said.
Revenues for the recent fiscal year increased 6.4 percent to $593 million compared with $557.5 million in the previous year.
Cracker Barrel Old Country Store bought Logan’s Roadhouse in 1998 before selling it in late 2006 to a group of private equity investors. LRI Holdings filed for an initial public offering in June 2010.
LRI Holdings was founded 20 years ago in Lexington, Ky., and is now based in Nashville, Tenn.
Contact Alan Snel at [email protected].
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