WICHITA, Kan., August 21, 2003 (PRIMEZONE) -- Lone Star Steakhouse & Saloon, Inc., (Nasdaq:STAR) "Lone Star," estimates that it will earn between $2,900,000 and $3,500,000 or $.12 to $.15 per fully diluted share for its fiscal third quarter ending September 9, 2003.
Continued high costs for beef, which account for nearly 60% of cost of sales, is the primary cause of margin erosion. Meat costs were up approximately $2,600,000 or 20% over the prior year during the first 8 weeks of the third quarter. Other sources of margin pressure include maintenance costs, utilities and insurance. Due to uncertainties surrounding future beef costs, the timing, lost revenues and costs associated with the Company's plans to close several units during remodeling, the Company estimates that its net earnings for fiscal 2003 will be in the range of $22,000,000 to $26,000,000 or $.92 to $1.08 per fully diluted share, based on the current share count.
Adjusted for Father's Day which was in Q3 2002, comparable store sales growth through the first 8 weeks of fiscal Q3 were 1.2% for domestic Lone Star restaurants, 19.6% for Del Frisco's restaurants, 11.1% for Sullivan's restaurants and 1.5% for Australian Lone Star restaurants. Actual comparable store sales growth (decline) through the first 8 weeks of fiscal Q3 were (1.1%) for domestic Lone Star restaurants, 19.3% for Del Frisco's restaurants, 9.7% for Sullivan's restaurants and 1.5% for Australian Lone Star restaurants.
The Company estimates it lost 50 store days and an estimated $320,000 in revenue due to issues related to the electric power outage last week.
Lone Star owns and operates 249 domestic and 20 international Lone Star Steakhouse & Saloon restaurants; 15 Sullivan's Steakhouse restaurants; five Del Frisco's Double Eagle Steak House restaurants and one Frankie's Italian Grille restaurant. Licensees operate three domestic and one international Lone Star restaurants, and one domestic Del Frisco's Double Eagle Steak House restaurant.
This press release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Although the Company believes the assumptions underlying the forward-looking statements contained herein, including 2003 operating performance, and comparable sales of the Company, are reasonable, any of the assumptions could be inaccurate, and therefore, there can be no assurance that the forward-looking statements contained in the press release will prove to be accurate.