Luby's says turnaround underway after Fuddruckers owner wins proxy contest

Luby’s Inc (NYSE:LUB) said Monday its turnaround is underway after publishing first-quarter results and winning a proxy contest against a slate including former Republican Senator Phil Gramm of Texas.

The owner of the Fuddruckers restaurant chain said Friday in a statement that a preliminary count indicated that shareholders had supported the election of all nine of the company’s director nominees. The shareholders rejected the four directors nominated by Bandera Partners LLC, including Bandera portfolio manager Jeff Gramm and his father, former Senator Phil Gramm (R-Texas).

“Our turnaround of the business is underway,” CEO Chris Pappas said in a statement Friday. “While sales pressure persisted in the first quarter, we reduced our food and operating costs at a greater percentage than the sales declined.”

READ: McDonald’s reports super-sized second-quarter results but US sales fizzled

He added that its property asset sales have generated proceeds of $26.8 million and that reductions in corporate overhead have saved more than $3 million annually.

Like other restaurant companies, Luby’s is facing challenges in terms of sustaining growth.

For the first quarter ended December 19, the company reported that while culinary contract services increased to $9.5 million from $2.6 million, same-store sales decreased 5.5%.

The loss from continuing operations was $7.5 million, compared with a loss of $5.5 million a year earlier.

Shares of Luby’s slipped $0.02 to $1.53 in Monday’s New York trading.

Contact Dennis Fitzgerald at [email protected]

Story by ProactiveInvestors