Wunderlich Securities Lowers FY15 SSS Guidance on Ruby Tuesday

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In a report published Friday, Wunderlich Securities analyst Robert M. Derrington reiterated a Hold rating and $8.00 price target on
Ruby TuesdayRT
. In the report, Wunderlich Securities noted, “Yesterday afternoon, Ruby Tuesday reported Q2FY15 (Nov.) EPS from ops. ex-items of -$0.15 vs. our -$0.13 and the Street -$0.14 estimates, and vs. -$0.43 last year. The loss reflected weaker SSS (down 1%) and a 5% decrease in revenues impacted by 42 store closures in the last 12 months. Despite its weaker sales leverage, the company managed to improve restaurant margin (ex-D&A) by 113 bps to 13.6% (though below our 14.9%), reflecting some cost savings including more efficient marketing expenditures. As a result of the recent weaker and volatile operating trends, management lowered its SSS guidance for FY15 to -1% to +1% vs. prior guidance of +1% to +2%.” Ruby Tuesday closed on Thursday at $7.10.
Posted In: Analyst ColorReiterationAnalyst RatingsRobert M. DerringtonWunderlich Securities
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