logo
Share SHARE
FONT-SIZE Plus   Neg

Ruby Tuesday Profit Drops, Again Cuts FY View; Shares Down - Update

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

For comments and feedback: editorial@rttnews.com

Business News

Editors Pick
Volkswagen plans to invest about 22.8 billion euros in its core brand from 2018 to 2022, with main focus on e-mobility and modularization. In a statement on Saturday, the German automaker announced that the investments, as part of the brand's Transform 2025+ strategy, will significantly boost the brand's largest product and technology offensive. Health IQ Insurance Services, a startup focused on providing life insurance for health-conscious individuals, said it has secured $34.6 million in Series C funding, led by Andreessen Horowitz. To date, the company has raised a total of $81 million in funding mostly from its existing investors. General Motors Co. is recalling nearly 49,000 trucks worldwide to fix a fuel tank issue that can increase the risk of a fire. The recall covers Chevrolet Silverado 3500 and GMC Sierra 3500 trucks from the 2011 through 2015 model years, all equipped with dual fuel tanks.
comments powered by Disqus
Follow RTT