Ruby Tuesday Comes Up Shy on Q3 Sales, Boosts Full Year Outlook

Andrew Klips |

Ruby Tuesday Comes Up Shy on Q3 Sales, Boosts Full Year OutlookShares of Ruby Tuesday (RT) are giving back part of the day’s gains after releasing its third-quarter financial report after the closing bell on Wednesday showing the restaurant operator matched earnings expectations, but came up short on total sales. The company also boosted its outlook for the full year fiscal 2013 above consensus predictions.

For the quarter ended March 5, Ruby Tuesday reported total revenue of $307.39 million, down 4.16 percent from $320.713 million in the year prior quarter. Net income from continuing operations also dropped to $4.7 million, or 8 cents per share, from $6.9 million, or 11 cents per share. Excluding special items, non-GAAP net income was $6.3 million, or 10 cents per share, compared to $13.9 million, or 22 cents per share in the fiscal 2012 quarter.

Wall Street was expecting earnings of 10 cents per share on revenue of $312.3 million. Analysts generally don’t include special items in the expectations.

The company shuttering Marlin & Ray’s, Truffles Grill and Wok Hay concepts qualified as discontinued operations during the quarter. Net loss from discontinued operations was $2.5 million, or 4 cents per share, about even with the year prior quarter’s figure.

Same store sales decreased 2.8 percent at corporate stores and 1.7 percent at domestic franchise locations compared to the same period last year.

The company remained optimistic in its statement of the earnings. “I am pleased with the progress we have made in evolving the Ruby Tuesday brand over the past quarter. We believe the initiatives we are working on will shift consumers’ perceptions of the brand toward a more mainstream, lively, and approachable position,” said JJ Buettgen, president and chief executive at Ruby Tuesday.

During the third quarter, Ruby Tuesday repurchased 1.3 million shares of its common stock for an aggregate $10.1 million.

Looking ahead, the company guided EPS in the range of 18 cents to 22 cents and non-GAAP EPS between 28 cents and 32 cents for the full year fiscal 2013. This was up from its previous outlook of GAAP EPS between a 3-cent net loss and 3 cent net profit and non-GAAP EPS earnings of 24 cents to 30 cents.

Analysts were predicting adjusted profits of 25 cents per share for the year.

Shares traded ahead on Wednesday during regular hours by 5.3 percent to close at $8.16. As investors mulled the revenue miss, but upbeat guidance, shares ducked back by 2 percent, but remained positive on the day. Shares are relatively flat so far in 2013.

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Companies

Symbol Name Price Change % Volume
CUBE.P.A CubeSmart 7.75% Series A Cumulative Redeemable Pre n/a n/a n/a 0
RT Ruby Tuesday Inc. 3.05 -0.01 -0.33 257,954

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