The company will kick off the expansion with the opening of a new prototype store here next month. Next year Luby's executives expect to open four to six of the prototype units and then complete the rest of the expansion within five years.
"We believe the expansion of new units will generate favorable unit sales and strong returns on investment creating an attractive long-term growth vehicle for the company," says Chris Pappas, the company's president and chief executive officer, in a statement. Pappas says Luby's will also consider acquisitions for growth.
During the release of the company's second-quarter results last month, Pappas said that he expects the prototype stores to generate strong sales. The roll out is taking place in an industry that Pappas says, "remains challenging with rising food commodity costs and new minimum wage increases that will impact labor costs."
During its second quarter, which ended May 9, same-store sales fell 1.9% year over year, while total sales dropped 2.7%, to $75.9 million. Net income slid to $3.9 million from $6.9 million during the same year-ago period.
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