Fast-Growing Rubio's Chain Reports Earnings Lower Than Expected

CARLSBAD-Rubio’s Restaurants Inc. today announced that earnings will fall short of analysts’ estimates, due to cost pressures and lower unit sales at the fast-growing restaurant chain.

Full-year 2000 earnings per share for the Carlsbad-based chain are now expected to be in the range of 12 to 14 cents, compared to the analyst’s consensus of 18 cents.

Cost pressures impacting the company in the fourth quarter include higher-than-expected labor costs due a significant increase inCalifornia workers’ compensation costs, as well as higher energy and food costs.

The company has opened all 36 company-owned restaurants originally projected for fiscal 2000. There are now a total of 126 Rubio’s BajaGrill company-owned restaurants, including 11 that opened during the fourth quarter. Additionally, the company expects fourth-quarter comparable sales to be essentially even with the prior year, which is inline with analysts’ consensus.

The company expects to end fiscal 2000 with $8 to $9 million in cash and investments and no debt on its books. Full results for the fourth quarter ending, Dec. 31, 2000 will be announced in February 2001.

“We have some challenges ahead of us but we have a plan to address them,” says Ralph Rubio, chairman/CEO. “First, we are taking a price increase to offset some of the cost pressures. Second, we are taking decisive marketing steps in order to improve comparable sales. Third, we are slowing down our company store growth to preserve capital.”