Restaurant chain Ruby Tuesday Inc. (RT), Wednesday reported a sharp decline in third-quarter profit, hurt mainly by one-time charges and higher payroll expenses. Results also were impacted by shoddy same-store results that led to a lower-than-expected sales growth.
Going forward, the company again cut its full-year 2012 outlook mainly to reflect charges related to the planned closure of unviable assets during the fourth quarter. The news dragged down shares of Ruby Tuesday by 12 percent in after-hours trade on the New York Stock Exchange.
Ruby Tuesday said its third-quarter results were impacted by pre-tax costs of $9.6 million related to the planned closure of 25 to 27 under-performing restaurants.
Revenue for the quarter edged up 1.8 percent from last year, while same-restaurant sales fell 5 percent at company-owned namesake restaurants.
Maryville, Tennessee-based Ruby Tuesday reported third-quarter net income of $4.5 million or $0.07 per share, compared to $16 million or $0.25 per share in the prior year.
Excluding items, adjusted earnings were or $11.6 million or $0.18 per share, compared to $15.7 million or $0.24 per share a year ago. On average, six analysts polled by Thomson Reuters expected earnings of $0.16 per share for the quarter. Analysts' estimates typically exclude special items.
Revenue for the quarter totaled $324.8 million, compared to $319 million last year. Analysts expected $339.03 million.
Ruby Tuesday now expects fiscal year 2012 earnings in the range of $0.27 to $0.32 per share, and adjusted earnings of $0.43 to $0.48 per share. Earlier, it had forecast earnings of $0.55 to $0.65 per share. Analysts currently expect earnings of $0.56 per share for the year.
Ruby Tuesday expects 2012 same-restaurant sales for company-owned restaurants to be down between 4 and 4.5 percent.
Additionally, Ruby Tuesday, which is a licensee of Lime Fresh Mexican Grill, revealed plans to acquire the latter for $24 million. The transaction, which includes the brand's intellectual property rights and assets of seven company-owned restaurants, as well as royalties from five franchised restaurants, is expected to close in the fourth quarter.
RT is trading at $8.88, down $0.18 or 1.99%, on a volume of 1.09 million shares on the NYSE. In after hours, the stock dropped $1.07 or 12.05%.
by RTT Staff Writer
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