Logan’s Roadhouse’s same-store sales rose 0.1 percent in the second quarter, its first positive same-store sales result in 13 quarters, parent company LRI Holdings Inc. said on Thursday.
But the result was not enough to keep the company from widening its losses. LRI reported a net loss of $11.9 million in the quarter ended Feb. 1, 32 percent wider than the previous year, when the company lost less than $9 million.
Revenue increased 0.8 percent for the quarter, to $154.2 million, from $153.1 million the previous year. The company opened one new restaurant in the first half of the fiscal year.
“We feel we are making marked progress against our strategic plans to improve our business,” CEO Sam Borgese said in a statement this week. The company had scheduled its earnings call for Thursday but delayed it a week.
Under Borgese, who took the helm in October, the company has been overhauling its management and working to eliminate discounts. The chain is attracting fewer customers, but they are paying higher prices. Traffic fell 5.5 percent in the second quarter, but average check increased 5.9 percent, leading to the same-store sales increase.
Logan’s sales weakness, combined with steep debt and rising costs, has contributed to regular losses that have put the company on precarious financial footing.
The company has $376 million in long-term debt and a retained deficit of $242 million, according to SEC filings. Most of the company’s net loss in the second quarter can be attributed to $10.7 million in interest expense on that debt.
But that’s not the only problem. The company reported an operating loss of $1.2 million in the quarter, compared with an operating profit of $1.5 million. Much of the decline came from a nearly $1 million increase in restaurant impairment and closing charges. But part of it also came from a 7.4-percent increase in cost of goods sold, likely higher commodity costs.
For the first half of the fiscal year, the company has had an operating loss of $3.7 million, compared with an operating loss of $206,000 the previous year.
For the first half of the company’s 2015 fiscal year, its net loss widened to $24.8 million, from $21.1 million the previous year. Adjusted EBITDA, or earnings before interest, taxes, depreciation and amortization, decreased 20.4 percent, to $13.1 million, from $16.5 million.
Logan’s Roadhouse has 261 locations.
Contact Jonathan Maze at [email protected].
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