Luby's Reports Second Quarter 2016 Same-Store Sales Increased 2.2%
Store level profit increased to 14.8%, as a percent of restaurant sales, from 13.5% during the comparable 12 weeks last year
Luby's, Inc. (NYSE: LUB) yesterday announced unaudited financial results for its twelve-week second quarter fiscal 2016, which ended on March 9, 2016. Certain comparisons for second quarter fiscal 2016 are relative to the prior-year twelve-week period that ended March 11, 2015, instead of the second quarter fiscal 2015, which ended February 11, 2015. Comparisons in this press release for the second quarter fiscal year 2016 are referred to as "second quarter."
Second Quarter Highlights
- Same-store sales increased 2.2%
- Luby's Cafeterias same-store sales increased 3.1%
- Fuddruckers same-store sales were level year-over-year
- Cheeseburger in Paradise same-store sales increased 4.2%
- Revenue grew in each business segment: Company-owned restaurants, Culinary Contract Services, and Franchise operations
- Store level profit increased to 14.8%, as a percent of restaurant sales, from 13.5% during the comparable 12 weeks last year
- Adjusted EBITDA increased to $4.7 million compared to $3.3 million during the comparable 12 weeks last year
Chris Pappas, President and CEO, commented, "Solid same-store sales growth coupled with expanded store-level profit margins, as well as revenue growth in our Culinary Contract Services and Franchise operations, drove Adjusted EBITDA improvement in the second quarter. In addition, year to date Adjusted EBITDA was $10.4 million compared to $6.6 million last year, an increase of 57%. Our team continues to execute on our strategy to enhance store level performance across all of our brands with defined processes throughout the organization. We remain focused on the key drivers of our businesses to achieve operational excellence at our brands and to efficiently manage costs to grow profitability and enhance shareholder value."
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Same-Store Sales Year-Over-Year Comparison |
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|
Quarter Ended |
Two Quarters Ended |
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|
December 16, |
March 9, |
March 9, |
|
|
Q1 2016(3) |
Q2 2016(3) |
YTD Q2 2016(3) |
|
|
(16 weeks vs 16 weeks) |
(12 weeks vs 12 weeks) |
(28 weeks vs 28 weeks) |
|
|
Luby's Cafeterias |
1.2% |
3.1% |
2.0% |
|
Fuddruckers Restaurants |
1.3% |
0.0% |
0.7% |
|
Combo Locations (1) |
(1.3)% |
0.1% |
(0.6)% |
|
Cheeseburger in Paradise |
5.5% |
4.2% |
5.0% |
|
Total same-store sales (2) |
1.4% |
2.2% |
1.8% |
|
(1) |
Combo locations consist of a side-by-side Luby's Cafeteria and Fuddruckers Restaurant at one property location. |
|
(2) |
Note: Luby's includes a restaurant's sales results into the same-store sales calculation in the quarter after that store has been open for six complete consecutive quarters. In the second quarter, there were 88 Luby's Cafeterias, 59 Fuddruckers Restaurants, 3 Combo locations, and 8 Cheeseburger in Paradise locations that met the definition of same-stores. |
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(3) |
Q1 2016, Q2 2016, and YTDQ2 2016 same-store sales reflect the change in restaurant sales for the locations included in the same-store grouping for each of the comparable periods. |
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Second Quarter Restaurant Sales: |
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($ thousands) |
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|
Quarter Ended |
Comparable |
Quarter Ended March 9, 2016 |
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|
Restaurant Brand |
March 9, |
February 11, |
March 11, |
Change |
Change |
|||||||||
|
(12 weeks) |
(12 weeks) |
(12 weeks) |
(12 weeks vs 12 weeks) |
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|
Luby's Cafeterias |
$ |
52,915 |
$ |
54,574 |
$ |
52,144 |
$ |
771 |
1.5% |
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|
Fuddruckers |
24,567 |
22,820 |
23,636 |
931 |
3.9% |
|||||||||
|
Combo locations |
5,295 |
4,937 |
5,289 |
6 |
0.1% |
|||||||||
|
Cheeseburger in Paradise |
3,537 |
3,155 |
3,393 |
144 |
4.2% |
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|
Restaurant Sales |
$ |
86,314 |
$ |
85,486 |
$ |
84,462 |
$ |
1,852 |
2.2% |
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- Restaurant sales in the second quarter increased to $86.3 million, an increase of 2.2% versus the comparable 12 weeks of fiscal 2015.
- Luby's Cafeterias sales increased $0.8 million versus the comparable 12 weeks of fiscal 2015, due to a 3.1% increase in Luby's same-store sales offset by the closure of three locations. The 3.1% increase was the result of a 4.7% increase in guest traffic offset by a 1.5% decrease in average spend per guest.
- Fuddruckers sales increased $0.9 million versus the comparable 12 weeks of fiscal 2015, due to a net increase of five operating Fuddruckers restaurants. Fuddruckers same-store sales were unchanged year-over-year due to a 3.0% increase in average spend offset by a similar 3.0% decrease in guest traffic.
- Combo location sales increased marginally and represented 6.1% of total restaurant sales in the first quarter. The addition of our sixth Combo location was offset by a net decrease in sales at other Combo locations.
- Cheeseburger in Paradise sales increased 4.2%, with all eight Cheeseburger in Paradise locations in operation included in our same-store grouping.
- Store level profit, defined as restaurant sales plus vending revenue less cost of food, payroll and related costs, other operating expenses, and occupancy costs, was $12.7 million, or 14.8% of restaurant sales, in the second quarter compared to $11.4 million, or 13.5% of restaurant sales, during the comparable 12 weeks of fiscal 2015. Lower overall cost of food, payroll and related costs, and operating expenses led to this increase in profitability. Store level profit is a non-GAAP measure, and reconciliation to income from continuing operations is presented after the financial statements.
- Culinary Contract Services revenues increased to $3.9 million with 28 operating locations in the second quarter compared to $3.8 million with 24 operating locations during the comparable 12 weeks of fiscal 2015. Culinary profit was 10.2% of Culinary Contract Services sales in the second quarter and 10.6% in the comparable 12-week period of fiscal 2015. Both quarters exceeded our profit targets for the business segment.
- Franchise revenue increased 8.4% versus the comparable 12-week period of fiscal 2015. In the second quarter, one international franchisee opened a location in Panama.
- Income from continuing operations was a loss of $0.6 million, or a loss of $0.02 per diluted share, compared to a loss of $1.3 million, or a loss of $0.04 per diluted share, in the second quarter fiscal 2015. Excluding special items, loss from continuing operations was $0.9 million, or a loss of $0.03 per diluted share, in the second quarter compared to a loss of $2.1 million, or a loss of $0.07 per diluted share, in the second quarter fiscal 2015.
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Reconciliation of loss from continuing operations to loss from continuing operations, before special items (1,2): |
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|
Q2 FY2016 |
Q2 FY2015 |
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|
Item |
Amount |
Per Share |
Amount |
Per Share |
|||||||||||||
|
Loss from continuing operations |
$ |
(582) |
$ |
(0.02) |
$ |
(1,285) |
$ |
(0.04) |
|||||||||
|
Less: Gain on asset disposals, net of impairments |
(343) |
(0.01) |
(765) |
(0.03) |
|||||||||||||
|
Loss from continuing operations, before special items |
$ |
(925) |
$ |
(0.03) |
$ |
(2,050) |
$ |
(0.07) |
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(1) |
We use income (loss) from continuing operations, before special items, in analyzing results, which is a non-GAAP financial measure. This information should be considered in addition to the results presented in accordance with GAAP, and should not be considered a substitute for the GAAP results. Luby's has reconciled loss from continuing operations, before special items, to loss from continuing operations, the nearest GAAP measure in context. |
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(2) |
Per share amounts are per diluted share after tax. |
Balance Sheet and Capital Expenditures
We ended the second quarter with a debt balance outstanding of $37.0 million, down from $37.5 million at the end of fiscal 2015. During the second quarter, our capital expenditures were $5.2 million, compared to $7.4 million in the second quarter fiscal 2015. At the end of the second quarter, we had $1.4 million in cash and $173.1 million in total shareholders' equity.
Fiscal Year to Date:
- Restaurant sales were $199.9 million during the first two fiscal quarters (28 weeks) of 2016, a $4.2 million increase from the comparable 28 weeks of fiscal 2015
- Same store sales increased 1.8% during the first two fiscal quarters of 2016 (28 weeks) from the comparable 28 weeks of fiscal 2015
- Store level profit was $29.5 million, or 14.8% of restaurant sales, in the first two quarters (28 weeks) of fiscal 2016, a $3.9 million increase from $25.6 million, or 13.1% of restaurant sales, in the comparable 28 weeks of fiscal 2015
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Restaurant Counts: |
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|
August 26, |
FY16 YTD |
FY16 YTD |
March 9, |
||||||||
|
Luby's Cafeterias(1) |
93 |
— |
(1) |
92 |
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|
Fuddruckers Restaurants(1) |
75 |
3 |
(1) |
77 |
|||||||
|
Cheeseburger in Paradise |
8 |
— |
— |
8 |
|||||||
|
Other restaurants(2) |
1 |
— |
— |
1 |
|||||||
|
Total |
177 |
3 |
(2) |
178 |
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(1) |
Includes 6 restaurants that are part of Combo locations |
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(2) |
Other restaurants include one Bob Luby's Seafood |
About Luby's
Luby's, Inc. (NYSE: LUB) operates 178 restaurants nationally: 92 Luby's Cafeterias, 77 Fuddruckers, 8 Cheeseburger in Paradise and one Bob Luby's Seafood Grill. The Company is the franchisor for 112 Fuddruckers franchise locations across the United States (including Puerto Rico), Canada, Mexico, Italy, the Dominican Republic, Panama, Chile, and Colombia. Additionally, a licensee operates 35 restaurants with the exclusive right to use the Fuddruckers proprietary marks, trade dress, and system in certain countries in the Middle East. The Company does not receive revenue or royalties from these Middle East restaurants. Luby's Culinary Contract Services provides food service management to 28 sites consisting of healthcare, higher education and corporate dining locations.