Luby’s Inc. focused on fresh vegetables in enhancements to its namesake cafeteria brand’s menu in early July, executives said during an earnings call Thursday.
The Houston-based operator, which is also parent to the Fuddruckers burger chain, said consumers responded positively to the menu innovations.
“We are highlighting for the foreseeable future new and fresh, colorful vegetable presentations,” said Peter Tropoli, Luby’s chief operating officer, during a third-quarter earnings call.
The emphasis on fresh vegetables and variety align with Luby’s brand pillars, Tropoli said, and offer a wide selection that differentiates the cafeteria concept from other restaurant options.
“Our stores have a list to choose from daily, which includes roasted carrots, cauliflower, braised purple cabbage, roasted mushrooms, fresh green beans, fresh kale and sweet potatoes,” Tropoli said.
Chris Pappas, Luby’s president and CEO, said the company suffered in the third quarter from “continued challenges that are pressuring restaurant sales.”
Luby’s systemwide same-store sales declined 2.7 percent in the third quarter ended June 7, the company said.
K. Scott Gray, Luby’s chief financial officer, said the same-store sales decline of 2.5 percent at the cafeterias included a 7.1-percent drop in traffic, with a 4.6-percent increase average spend. Luby’s did less cafeteria discounting in the most recent third quarter, he said, which compared with a popular buy-one-get-one offer the previous year.
Same-store sales fell 0.9 percent at Fuddruckers, declined 6.5 percent at combination Luby’s-Fuddruckers locations and dropped 7.3 percent at eight-unit Cheeseburger in Paradise.
“Industry pressures persist, and consumers continue to have a broad range of choices, contributing to a very competitive restaurant space,” Gray said.
Sales were especially pressured by the Texas economy in the third quarter, Tropoli said.
Luby’s cafeterias are looking to develop a digital loyalty program by early 2018, he said, as well as other improved technology enhancements at all the brands.
A company-owned Fuddruckers location in The Woodlands, Texas, near Houston, recently debuted the brand’s first self-order kiosks, Tropoli said.
Luby’s Culinary Contract Services division opened three new locations and contributed about $1 million in additional revenue during the quarter.
Luby’s third-quarter net loss widened to $396,000, or 1 cent per share, from $134,000, also 1 cent per share, the previous year. Sales fell 3.7 percent, to $88.7 million, from $92.1 million the previous year.
Luby’s Inc. operates 170 restaurants nationwide: 89 Luby’s Cafeteria units, 72 Fuddruckers locations, eight Cheeseburger in Paradise restaurants and one Bob Luby’s Seafood Grill outlet. The company also franchises 112 Fuddruckers units, and a licensee operates 34 restaurants in the Middle East. Luby's Culinary Contract Services provides foodservice management to 25 healthcare and corporate-dining sites.
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