Luby's 3Q store level profit, restaurant sales up
June 9, 2011
by Meat&Poultry Staff
HOUSTON – Luby's Inc., which operates restaurants under the brands Luby's Cafeterias, Fuddruckers and Koo Koo Roo, announced for the third quarter fiscal 2011 ending May 4 store level profit (restaurant sales less food costs, payroll and related costs and other operating expenses) was $12.6 million in the third quarter of fiscal 2011, or 16.1 percent of restaurant sales, compared to $9.7 million in the third quarter of fiscal 2010, or 18 percent of restaurant sales.
Restaurant sales increased $66.4 million to $220.1 million during the first three fiscal quarters of 2011, including $61.0 million in sales from its Fuddruckers restaurants. Luby's Cafeteria restaurants sales rose 3.5 percent, or $5.4 million, during the period. Loss from continuing operations was $256,000 in the first three quarters of fiscal 2011, compared to a loss of $1.7 million in the same period of fiscal 2010.
Store level profit as a percentage of restaurant sales declined due to rising food costs, higher occupancy expenses and an uptick in other costs, especially insurance, supplies and repairs and maintenance, partially offset by reduced marketing and advertising expenses.
Restaurant sales were $78.1 million, an increase of $24.1 million compared to the same quarter last year. During the quarter, same store sales grew 3.5 percent at the Luby's Cafeterias restaurants compared to the same quarter last year. An increase in customer traffic generated the sales increase, which was partially offset by a 1 percent decline in customer check average. The Fuddruckers and Koo Koo Roo locations added approximately $22.2 million to restaurant sales.
Revenue from Culinary Contract Services increased 9.1 percent to $3.6 million in the third quarter fiscal 2011 compared to the same fiscal quarter last year. Culinary Contract Services operated 18 facilities as of May 4 versus 17 facilities at the end of the third fiscal quarter last year.
"We continued to generate solid increases in customer traffic to our cafeteria locations in the third quarter,” said Chris Pappas, president and CEO. “Our 'All You Can Eat Breakfast' on the weekends continues to generate repeat visits from satisfied customers. As we move toward the summer, we are in the process of launching a number of local marketing promotions to get our customers out of their kitchens and into our restaurants.
"There are opportunities to grow our brands, both in existing and new markets,” he added. “In June, we will be opening our first new Fuddruckers in the Houston central business district. The 3,500 square foot facility will be smaller than a prototypical Fuddruckers."
Food costs rose approximately $7.2 million in the third quarter fiscal 2011 compared to the same fiscal quarter last year, primarily due to the sales volume from the newly-acquired Fuddruckers system.
Fuddruckers restaurants results were impacted by inflation in beef prices, resulting in higher food costs as a percent of restaurant sales than at our cafeteria restaurants.