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Luby's Posts Mixed Q1

HOUSTON-Same store sales are up, but the Texas restaurant chain posts losses.

By Dees Stribling | Updated on January 02, 2005

HOUSTON-Luby’s Inc., a regional chain of cafeterias that has been streamlining by closing some of its underperforming restaurants in recent years, saw same-store sales increase 4.2% over the prior year for its fiscal 2005 first quarter, ended Nov. 17, 2004. However, the company also posted a net loss for the quarter of $1.2 million, or $0.05 per share, compared to a $4.5 million loss for Q1 2004, or $0.20 per share.

“It was a mixed quarter for Luby’s,” company president and CEO Chris Pappas said during the company’s sales conference call late last week, noting that the quarter’s loss was smaller than that of the previous year’s first quarter, despite certain higher expenses currently plaguing the restaurant industry, especially higher food and energy costs.

“As the quarter with the lowest sales, the first quarter is always challenging for us,” he continued. “Despite higher food commodity prices, which hurt margins, we posted better year-over-year results due to sales increases, lower interest costs, lower general and administrative expenses, and lower discontinued operations charges.” Luby’s reported a loss before discontinued operations of $0.7 million this quarter, compared with a loss before discontinued operations of $2.0 million in Q1 2004.

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