MINNEAPOLIS Buca di Beppo parent Buca Inc. said its losses deepened to $4.2 million, or 20 cents per share, for the first quarter ended March 30, compared with a net loss of $2.8 million, or 14 cents per share, in the year-ago period.
The net loss included charges of about 4 cents per share for severance payments in January and about 3 cents a share for the settlement of a wage-and-hour lawsuit in California, said John Bettin, chief executive and president of the casual-dining company.
Same-store sales for the quarter declined 2.5 percent, Buca said. Bettin disclosed that the chain hopes to boost sales by rolling out a catering program and adopting a new lunch menu.
The severance payments were part of a $2.1 million reduction in the company’s workforce, including the resignation of Wallace Doolin as chief executive. Doolin said at the time that he would continue as chairman to explore “strategic alternatives” for the company, a term that often presages a sale or recapitalization.
Total revenues for the first quarter declined to $60.1 million, compared with $62.8 million in the first quarter last year. Buca blamed the 4.3-percent drop on the closing of four restaurants since the start of fiscal 2007 and the decrease in same-store sales. It previously announced that it plans to open one new restaurant this year. Buca currently operates 89 branches in 25 states and the District of Columbia,
Bettin said in a statement that the restaurants did a good job of managing costs. Labor expenses as a percentage of sales declined to 34 percent, compared with 34.8 percent for the first quarter of fiscal 2007. Buca attributed the decline to a decrease in medical claims.
However, food costs as a percentage of sales rose to 25.4 percent, compared with the 24.5 percent logged in the year-ago quarter. The company attributed the increase to the cancellation of the chain’s annual Paisano Conference, a gathering scheduled during the quarter of the chain’s executives, vendors and equity partners. The event would have been subsidized as it has been in past years by contributions from vendors, with their sponsorships counting as a reduction in the chain’s product costs. Without those credits, product costs increased as a percentage of sales, the company explained.
