With reduced consumer spending and a decline in guest traffic, restaurant chain operator

Luby's

(LUB) - Get Report

reported on Dec. 17, 2008, that its first-quarter fiscal 2009 earnings swung to a net loss -- $2.19 million or 8 cents per share compared to a profit of $4.77 million or 17 cents per share a year ago.

In addition, Hurricane Ike-related expenses contributed $900,000 to the net loss. The latest quarterly results beat the consensus estimate of a 9-cent loss per share.

During the first quarter, revenue dropped 6.0% to $68.95 million from $73.36 million in first-quarter 2008, hurt by declining same-store sales and the impact of Hurricane Ike, which affected its operations at over 40 stores. Furthermore, revenue from restaurant sales stood at $65.95 million, down 7.9% from $71.63 million, affected by a $2.60 million decline in sales related to closed stores, 3.1% from the negative impact of Hurricane Ike and the unfavorable calendar shift associated with Thanksgiving.

However, this was offset by a $1.50 million increase in sales from a new store. In addition, culinary contract services revenue surged 73.7% to $3.00 million from $1.73 million in the year-ago quarter. On a same-store basis, sales decreased $4.50 million or 6.7% year over year, as a result of the decline in the number of customers, partially offset by higher menu prices.

Recently, Luby's launched a new branding and advertising campaign, "Here, You Rule," providing its guests the freedom to control their entire dining experience at Luby's.

Looking forward to 2009, Luby's reaffirmed its expectations to open one to two new restaurants. Moreover, Luby's anticipates its restaurant sales to decline by $5 million per store closure, while its culinary contract service sales grow 20% to 30% over 2008 levels. Furthermore, the company expects its capital expenditures to be in the range of $12 to $17 million.

Once these most recent quarterly results are finalized, they will be run through TheStreet.com Ratings' model and our ratings will be adjusted accordingly. To keep up to date on all of our ratings, visit

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