Ruby Tuesday Shares Plunge Over 13% On Poor Results

(RTTNews) - Casual dining restaurant chain Ruby Tuesday Inc. (RT), Wednesday reported a loss for the first quarter from a profit last year, hurt mainly by some weak same-store sales and costs related to store closures. Earnings for the quarter came in well short of Wall Street expectations, as did revenues.

Shares of the Ruby Tuesday plunged over 13 percent on the New York Stock Exchange following the news.

Ruby Tuesday had appointed JJ Buettgen as its new CEO last November, replacing retiring founder Sandy Beall. Since Buettgen had been trying turn around and reposition the company, with the introduction of new menu and new marketing strategies, while closing down Marlin & Ray's and Wok Hay restaurants concepts.

Despite the ongoing efforts, same-restaurant sales decreased 11.4 percent at company-owned Ruby Tuesday restaurants and decreased 8.4 percent at domestic Ruby Tuesday franchise restaurants.

Ruby Tuesday's revenues for the first quarter dropped to $289.67 million from $327.92 million a year ago. Five analysts polled by Thomson Reuters had a consensus revenues estimate of $298.27 million for the quarter.

"The first quarter was challenging as the overall economy failed to realize any significant improvements which adversely affected us and the casual dining industry. We are disappointed that our first quarter same-restaurant sales came in below our expectations," Buettgen said.

"I remain confident in our brand transformation strategy and in our team's ability to successfully execute our plans. Looking ahead to the remainder of fiscal 2014, our top priorities are driving increased guest counts and profitable sales growth," Buettgen added.

Ruby Tuesday's first-quarter loss was $22.2 million or $0.37 per share, compared to a profit of $2.6 million or $0.04 per share last year.

The company recorded pre-tax impairment charges and lease reserves of $7.5 million related to under-performing or closed company-owned stores.

Loss from continuing operations, which excludes special items, was $0.36 per share, compared to earnings of $0.05 per share last year. On average, six analysts expected a loss of $0.05 per share for the quarter. Analysts' estimates typically exclude special items.

Moving ahead, the company refused to provide its earnings guidance for the full year 2014, as a result of the implementation of a number of strategic initiatives and due to the challenging casual dining environment.

The company expects same-restaurant sales to be down high single digits in the second quarter with sequential improvement in the third and fourth quarter.

RT closed Wednesday's regular trade at $7.55, up $0.31 or 4.28%. The stock, however, plunged $1.03 or 13.64% in after-hours trade.