Ruby Tuesday Inc. reported a net loss of $4.2 million in the first quarter ended Sept. 1, largely because of increased repair, maintenance and supply costs in the period, the company said Thursday.
The Maryville, Tenn.-based company reported a loss of 7 cents a share, compared with a profit of $2.6 million, or 4 cents a share, in the same period a year ago.
Revenue in the quarter fell 0.6 percent, to $279.5 million, from $281.2 million in the prior-year period, which the company said was mostly due to a net reduction of 11 company-owned restaurants compared with the first quarter last year.
Same-store sales rose 0.6 percent at company-owned locations, mostly on increased check averages, but year-over-year guest counts declined 2.9 percent in the quarter.
“We were pleased with positive same-restaurant sales in the quarter on top of a relatively strong sales performance in the first quarter of last year,” James “JJ” Buettgen, Ruby Tuesday president, chairman and CEO, said in a statement.
“Year-over-year first-quarter restaurant-level margins and profitability contracted primarily due to an increase in other restaurant operating costs, mainly repair and maintenance expense and other restaurant supplies,” he said.
Buettgen said the company has accelerated spending in those “critical areas to ensure our restaurant facilities support the delivery of a consistently great guest experience. These were necessary investments that will support positive results in the future.”
Buettgen said Ruby Tuesday’s new inventory management system, which was rolled out completely in the first quarter, will benefit restaurant-level margins in the last half of the year.
Ruby Tuesday owns and franchises Ruby Tuesday and Lime Fresh brand restaurants. As of Sept. 1, it had 734 Ruby Tuesday restaurants in 44 states, 12 countries and Guam. It also had 27 Lime Fresh restaurants in six states and the District of Columbia.
Franchisees operate 78 of the Ruby Tuesday restaurants and eight of the Lime Fresh units.
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