Sbarro's sales slide 11% for first half '03

Aug. 27, 2003

MELVILLE, N.Y. -- Sales at quick-service pizza and pasta operator, Sbarro, declined 11.2 percent for the 28-week period ended July 13, 2003.

According documents filed with the SEC, sales for the period were $156.8 million, compared to $176.4 million in the comparable period last year.

Sales in its second quarter, the 12 weeks ended July 13, decreased 9.8 percent to $68.2 million, compared with $75.7 million in the comparable period in 2002.

The company attributed the declines to "a reduction in shopping mall traffic related to the general economic downturn in the United States, the continuing impact of the events of Sept. 11, 2001 and the effects of the threatened and then actual military action in Iraq during the first quarter of fiscal 2003."

Sbarro store closures, which continue to outnumber openings, have drained sales figures as well. According to company documents, during the first half of the year, 23 stores were opened, while 29 were shuttered. As of July 13, the company and its franchisees operated 905 Sbarro units.

In an effort to streamline kitchen procedures, the company modified its pizza and pasta sauce recipes to utilize ready-made sauce instead of crushed tomatoes. It estimates the change will boost food cost by less than 1 percent.

And while cheese price increases did not impact costs significantly in the first half of 2003, the company expects the recent block price increases will increase costs in the latter half.

Topics: Public Companies

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