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Rubio's Posts Loss on Makeover Costs

Expenses for the food chain's re-branding campaign are blamed for its second-quarter loss of $3.2 million.

August 07, 2003|Karen Robinson-Jacobs | Times Staff Writer

The systemwide makeover at Rubio's Restaurants Inc. is costing more than anticipated as the food chain swung to a second-quarter loss of $3.2 million, the company said.

The Carlsbad, Calif.-based parent of Rubio's Fresh Mexican Grill restaurants lost 35 cents a share for the quarter ended June 29, compared with a profit of $1.1 million, or 12 cents, a year earlier. The quarterly loss was in line with the guidance Rubio's gave last month.

For the full year, the company expects a loss of 25 cents to 30 cents a share, though it expects to turn a profit in the second half.

Last year, the company -- which has 143 outlets in California and the West and is known for its fish tacos -- launched an aggressive re-branding campaign. Rubio's created an upscale prototype for newer outlets that includes an expanded salsa bar and a look patterned after sit-down, casual dining restaurants. The company also is offering larger portions and has upgraded packaging and expanded advertising.

The full effect of the upgrade was felt systemwide in the second quarter, Ralph Rubio, chairman and chief executive, said in a news release.

Revenue for the latest quarter rose 2% to $31.4 million from $30.7 million a year ago. Sales rose 0.3% at restaurants open at least one year, marking the seventh consecutive quarter of sales gains, the company said.

Rubio's released its earnings after the market closed Tuesday. On Wednesday, Rubio's stock gained 13 cents to $4.97 on Nasdaq. The company's stock has fallen 20% so far this year.

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