Revenue, Same-Store Sales Down at Luby's
Luby's Inc. today announced unaudited financial results for the first quarter of fiscal 2009.
-- Chain Leader, 12/17/2008 4:52:00 PM
PRESS RELEASE: HOUSTON--(BUSINESS WIRE)--Luby's, Inc. (NYSE: LUB) today announced unaudited financial results for the first quarter of fiscal 2009, a twelve-week period, which ended on November 19, 2008.
First Quarter Highlights:
* Restaurant sales were $65.9 million, a decrease of 7.9% compared to the same quarter last year; approximately 3.5% of the decline relates to the net effect of sales from closed stores in the prior year, partially offset by new store sales in the current year. Additionally, restaurant sales were negatively impacted during the quarter by approximately 3.1% due to the effects of Hurricane Ike and the calendar shift associated with Thanksgiving occurring one week later this year than last year
* Same-store sales, which consisted of 117 restaurants, decreased approximately $4.5 million, or 6.7% due primarily to declines in guest traffic partially offset by higher menu prices. The negative impact of Hurricane Ike and the unfavorable calendar shift on same-store sales were approximately 2.9%
* Culinary contract services revenue increased to $3.0 million in the first quarter compared to $1.7 million in the same quarter last year
* Cash flow from operations was $1.7 million in the first quarter, compared to $6.8 million in the first quarter last year
* Luby's launched a new branding and advertising campaign, "Here, You Rule" at the end of the first quarter. This new campaign distinguishes the Luby's brand by highlighting its made-from-scratch food and unique qualities that allow guests the freedom to control their entire dining experience at Luby's
Total sales decreased 6.0% in the first quarter fiscal 2009 to $68.9 million, compared to $73.4 million in the same quarter last year. Culinary contract services sales were $3.0 million in the first quarter compared to $1.7 million in the same quarter last year. Restaurant sales in the first quarter were $65.9 million compared to $71.6 million in the same quarter last year. The $5.7 million decrease in restaurant sales included $2.6 million in sales related to closed stores, partially offset by $1.5 million in new store sales compared to last year, and an estimated $2.1 million related to lost sales due to Hurricane Ike and the calendar shift associated with Thanksgiving. Excluding the negative impact of Hurricane Ike and the unfavorable calendar shift, same-store sales declined approximately $3.8% in the first quarter.
The Company had a loss from continuing operations in the first quarter of $2.1 million, or a loss of $0.08 per diluted share, compared to income from continuing operations of $4.8 million, or $0.17 per diluted share in the same quarter last year.
"In the first quarter, which included September, we experienced a worsening economy with sharp declines in the stock market, the collapse of the national credit markets and increased mortgage foreclosures, all of which negatively impact consumer confidence and retail sales. In addition, Hurricane Ike impacted our sales at over 40 stores and we incurred increased expenses related to damages and costs associated with re-opening our restaurants as quickly as possible," said Chris Pappas, President and CEO. "While there are still many economic challenges, we have confidence that we can weather this market downturn, as we have in the past, by making sound business decisions. As shareholders, Harris and I remain committed to Luby's and its long-term prospects. We both recently extended our employment agreements through the end of fiscal 2010, and are committed to managing Luby's through this difficult period to serve our customers, improve our business and enhance shareholder value for all Luby's investors."
Food costs decreased approximately $1.4 million in the first quarter fiscal 2009 compared to the same quarter last year due to lower sales volume. Food costs as a percentage of restaurant sales increased to 27.7% in the first quarter fiscal 2009 from 27.4% in the first quarter last year primarily due to increased commodity costs for oils, shortening, beef, produce and seafood partially offset by higher menu prices.
Payroll and related costs increased $0.2 million in the first quarter fiscal 2009 compared to the same quarter last year due to higher wage rates. Payroll and related costs as a percentage of restaurant sales increased to 37.4% in the first quarter fiscal 2009 from 34.1% in the same quarter last year, primarily due to the deleveraging of the cost of labor with lower sales volume. Last year's payroll and related costs for the first quarter fiscal 2008, as percentage of restaurant sales, benefited by 1.2% due to a reduction in workers' compensation expense.
Other operating expenses primarily include restaurant-related expenses for utilities, repairs and maintenance, advertising, insurance, supplies, services and occupancy costs. Other operating expenses increased by approximately $0.8 million compared to the same quarter last year. As a percentage of restaurant sales, other operating expenses increased 3.1%. Other operating expenses increased primarily due to Hurricane Ike related expenses.
Depreciation and amortization expense increased approximately $0.4 million in the first quarter fiscal 2009 compared to the same quarter last year due to higher depreciable asset base generated by increased capital expenditures in fiscal 2008, including the opening of three restaurants, as well as upgrades and remodels to existing units.
General and administrative expenses include corporate salaries and benefits related costs, including restaurant area leaders, share-based compensation, professional fees, travel and recruiting expenses and other office expenses. General and administrative expenses increased by approximately $0.1 million in the first quarter fiscal 2009 compared to the same quarter last year. As a percentage of total sales, general and administrative expenses increased to 8.9% in the first quarter compared to 8.1% in the same quarter last year. The increase was primarily due to a $0.4 million increase in corporate salary expense related to staffing costs including severances partially offset by lower professional fees.
Company Outlook
The Company anticipates that, given existing market conditions, current sales and expense trends will likely continue throughout fiscal 2009. The Company maintains its expectations to open one to two new restaurants in fiscal 2009.
Conference Call
The Company will host a conference call today at 4:00 p.m., Central Time, to discuss first quarter fiscal 2009 results. To access the call live, dial 888-755-9496 and use the participant pin code, Lubys (58297), at least 10 minutes prior to the start time, or listen live over the Internet by logging on to www.lubys.com.
About Luby's
Luby's operates 120 restaurants in Austin, Dallas, Houston, San Antonio, the Rio Grande Valley and other locations throughout Texas and other states. Luby's provides its customers with quality home-style food, value pricing, and outstanding customer service.
