The new CEO of Logan's Roadhouse has launched a number of programs to revamp the steakhouse chain's menu, operations and marketing but — after posting a $104 million quarterly net loss — on Thursday told analysts and investors progress will be slow in coming.
Logan's big fiscal Q4 loss was due primarily to a goodwill impairment of more than $91 million that was due to lower traffic trends and projected unit growth as well as commodity inflation. (A year ago, the Nashville-based chain similarly wrote down $48.5 million of goodwill.) Same-store sales at the 259-store chain fell 3.9 percent with traffic dropping almost 6 percent.
Andres, who joined Logan's from McDonald's early this year, is looking to turn around those numbers by revamping some of the company's staffing and food production processes as well as rolling out new marketing programs, emphasizing alcohol sales and testing a store prototype. Andres also has trimmed construction plans for fiscal 2014 to just five units — down from 13 this past year — to focus more closely on internal changes, but said the validation of those efforts will take a while.
Asked on his team's call with the investment community about the competitive environment, Andres singled out Texas Roadhouse, Longhorn, Outback and Lone Star and said he is looking to maintain Logan's value position while still lifting its average check, which grew just 1 percent this past year. Andres called that process of balancing menu evolution and price positioning "a very challenging ballet."
"I think we're more affordable than all [of those main competitors], but that's not necessarily a good thing," Andres said. "It's not where we need to be and want to be. We're looking at redefining what value is."
Andres made it clear on his call that there is an urgency to making progress — Logan's has posted a net loss of $155 million in the last two years — but that changes won't be rushed out across the board. The new prototype's engineering and design are being finalized and new advertising is being tested this quarter.
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