Lone Star Beefs Up Growth

WICHITA, KS-Despite a business environment in 2004 that saw beef purveyors facing record high wholesale prices as well as well-publicized fears of mad cow disease, Lone Star Steakhouse & Saloon Inc. managed to score positive same-restaurant sales growth in both its fourth fiscal quarter of 2004, and for the year as a whole. Comp growth for all of the company’s brands was 1.3% for Q4 2004 and 3.6% for the fiscal year ended Dec. 28.

Among the company’s different brands, however, the picture was a bit more mixed. Fourth-quarter comparable-restaurant sales declined 1.7% for domestic Lone Star Steakhouse & Saloon restaurants, but increased 3.1% for Sullivan’s Steakhouse restaurants, 17% for Del Frisco’s Double Eagle Steak Houses and 7.9% for Texas Land & Cattle Steak Houses; fiscal year 2004 comp restaurant sales growth was 0.6%, 5.6%, 23.2%, and 9.9%, respectively. Lone Star owns and operates 251 domestic Lone Star Steakhouse & Saloon restaurants; 15 Sullivan’s Steakhouses; five Del Frisco’s and 20 Texas Land & Cattle Steak Houses. Licensees operate three domestic and 13 international Lone Star restaurants, and one domestic Del Frisco’s Double Eagle Steak House.

The company attributed the uneven results to higher beef prices, among other factors. “Beef prices remained high versus historical levels throughout the year, exacerbated by the continuation of the mad cow problem,” noted Lone Star CEO Jamie B. Coulter. “Unfortunately, this situation will result in the company having to continue dealing with volatile beef prices for the foreseeable future.”