Limited Growth at Luby’s Inc.

Mike McAninch
by Mike McAninch | June 15, 2012 @ 3:21 pm | 0 

Growth at Luby’s  Inc. (NYSE:LUB) is screeching to a halt but that isn’t stopping the company from raising its 2012 earnings per share guidance. On Wednesday Luby’s announced a guidance increase they expect fiscal 2012 earnings from $0.18-0.21 per share, corrected form the previous estimates of $0.15-0.18 per share. The company estimates are now more in line with the street consensus price of $0.19 per share.

Luby’s Inc. owns and operates 96 Luby’s branded restaurants, owns 186 Fuddruckers franchises 56 of which are company run and 130 of which are franchised, and 3 Koo Koo Roo California Kitchens. The company serves up family meals at Luby’s in Texas, Arkansas, and Oaklahoma, various forms of fowl at Koo Koo Roo in Southern California, and the self proclaimed world’s greatest hamburgers at Fuddruckers across the United States.

Same store sales growth at Luby’s Inc. grew a measly 1.1% for their fiscal third quarter in comparison with growth of 2.2% in the second quarter and 3.5% in the first quarter. Third quarter net income came in at $2.4 million or $0.09 per share, a 50% increase from the same quarter last year. In the last 12 months the company has closed 3 Luby’s locations and opened 2 Fuddruckers locations.

As of 11:00 Luby’s Inc. is trading down 3.73% at $5.68, trailing the Dow Jones Industrial Average by more than 4%.

Foodbeat’s take:  Luby’s is down 40% since the start of the downturn in the American economy of 2008 despite the market having returned to form. Until they start showing some consistent growth and start paying a dividend your money is better invested elsewhere. The company has one Fuddruckers location in Canada, watch for them to look for more growth by penetrating less competitive markets.

Source: Reuters, NASDAQ, The Sacramento Bee