Luby's president and CEO Chris Pappas said during the chain's earnings conference call Monday that he was pleased with the chain's performance during the quarter, which occurred despite growing expenses related to natural gas prices and store maintenance. During the quarter, Luby's net income increased nearly 26% to $3.3 million, or 12 cents per diluted share, compared to net income of $2.6 million, or 10 cents per diluted share.

Luby's costs of food and payroll in the second quarter were 61.5% of sales, an improvement compared to 62.6% in the second quarter fiscal 2005. As a percentage of sales, food costs in the second quarter fiscal 2006 increased 0.1% compared to the second quarter fiscal 2005 due to higher prices in commodity sectors such as seafood, shortenings, oils and fresh produce.

Luby's, which operates 128 restaurants in Austin, Dallas, Houston, San Antonio, the Rio Grande Valley, also had a strong first quarter, reporting same-store sales increases of 6.9% and overall sales to $73.3 million.