MARYVILLE Tenn. Ruby Tuesday Inc. posted another quarter of financial results that topped both corporate and Wall Street expectations, as both cost cutting and improved consumer traffic paid dividends for the struggling casual-dining company.
For its fourth quarter ended June 2, profit rose to $14.4 million, or 28 cents per share, from $13.9 million, or 27 cents per share, in the same quarter a year ago. Fourth-quarter revenue fell 7.1 percent to $317.3 million, mainly because of 49 fewer restaurants in operations versus last year, including 48 restaurants that closed in the third quarter.
The company’s fourth-quarter results, which beat analyst expectations of 19 cents in earnings, follows third-quarter results that also topped projections and led to a stock surge. In its latest quarter, year-over-year guest traffic rose for the first time in more than a year, sales of higher-end items like lobster increased, and additional local marketing and advertising efforts drove results, the company said.
“This is our best relative performance in well over a year,” Sandy Beall, Ruby Tuesday's chairman, president and chief executive, said during a conference call with investors, “and we believe [it] not only reflects the success of our new marketing focus but also indicates [that] our repositioning is beginning to resonate as we get guests in to see the difference in our food, the way our people look, and the way the restaurants look.”
The operator or franchisor of 901 restaurants worldwide, which makes it one of the largest casual-dining chains, said fourth-quarter same-store sales fell 3.2 percent at corporate units and 6.9 percent at domestic franchised locations. The results included positive year-over-year traffic. The latest same-store sales declines also were much improved from previous declines of 6.8 percent in the third quarter and 10.8 percent in the first half of the year at corporate units.
Over the past few years, Ruby Tuesday has undertaken a brand repositioning aimed at creating a chain with more upscale food, decor and service. Today, the chain sees itself as competing against Olive Garden and Outback Steakhouse, rather than traditional bar-and-grill brands like Applebee’s or T.G.I. Friday’s. Ruby Tuesday still is offering lower-priced value items, especially today as consumers look to spend less, but sales of the chain’s specialty dinner items, like ribs, steaks or seafood, increased by 10 basis points, the company said. Latest culinary developments include the introduction of dishes at a variety of price points.
For the full fiscal year, Ruby Tuesday reported a loss of $17.9 million, or 35 cents per share, compared with a profit of $26.4 million, or 51 cents per share, a year earlier. The latest-year results included more than $73 million in impairment charges for restaurant closures and goodwill. Fiscal 2009 revenue fell 8.2 percent to $1.25 billion.
Ruby Tuesday said it expects same-store sales for the current fiscal year to remain negative, and decline between 2.5 percent and 3.5 percent. Fiscal 2010 earnings per share are expected to total between 50 cents and 65 cents.
Elissa Elan contributed to this article.
Contact Sarah E. Lockyer at [email protected].
