As a result, Rubio's estimates that the fiscal 2001 fourth quarter loss will likely be in the range of ($0.07) to ($0.09) per share, excluding one-time charges. This would be a slight improvement over the company's previous guidance of ($0.08) to ($0.10), excluding one-time charges. The company previously announced an estimated fourth quarter one time charge of between $4.6 million and $5.1 million related to stores closed at the end of October.
Fiscal 2002 Expectations
The company expects revenues to increase slightly in 2002, saying it intends to open a minimum of seven new company stores in its core markets. Revenue should also benefit from the full year sales of eighteen stores opened in 2001, along with a projected comparable sales increase of 1 percent to 2 percent. Revenue gains will be offset by the closure of 11 stores in October 2001 and one in early 2002. We expect restaurant margins to improve by at least 1.5 percent in 2002 over 2001, primarily as a result of the closure of the lower performing stores in 2001. Although Rubio's expect product costs to rise in 2002, it says the increase will be more than offset by expected decreases in labor, occupancy, and other expenses.
Marketing and Concept Positioning
Rubio's says it has completed significant research that gives guidance on how the company can refine the Rubio's concept to improve sales in existing markets and improve performance in new markets. To this end, it will be testing tactics developed from this research during 2002. These tactics could include changes in interior and exterior store design, menu enhancements, and advertising strategy. Rubio's has engaged outside design consultants to assist in this project.
Rubio's recently retained a new advertising agency to also assist in this area.