Ruby Tuesday Plummets 12% After Missed Earnings (RT)
Ruby Tuesday (NYSE: RT) has plummeted after reporting worse-than-expected earnings results.
The casual dining chain reported a first-quarter EPS of $(0.36) versus the Street estimate of $(0.05). This means that the company reported a loss that was $0.31 greater than expected.
Earnings per share were down 820 percent from the year-ago period.
Revenue came in at $289.7 million versus the estimated $298.59 million. Sales were down 13 percent year-over-year.
"The first quarter was challenging as the overall economy failed to realize any significant improvements which adversely affected us and the casual dining industry," JJ Buettgen, President and CEO of Ruby Tuesday, said in a company release.
"We are disappointed that our first quarter same-restaurant sales came in below our expectations. However, we made progress during the quarter in our strategy to re-establish Ruby Tuesday as a fun, energetic, and broadly-appealing brand, with the highlight being the August 12 launch of our new pretzel burgers and flatbreads. These items represented the first wave of our core menu transformation and the feedback from our guests has been encouraging as these new food platforms at price points of $5.99 to $9.99 address our guests' desire for innovation, variety, and affordability.
"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. In addition, we will aggressively work to lower our cost structure and have engaged a leading enterprise improvement consulting firm to assist us with cost reduction initiatives focused in the areas of cost of goods sold and selling, general, and administrative expenses. We are in the early stages of this initiative and plan on providing more details in our second quarter earnings release."
Buettgen's confidence may not inspire investors to come back to the company.
Year-to-date, Ruby Tuesday was down more than 12 percent before the market close.
The restaurant chain closed up 4.28 percent today, but those gains have now been diminished.
Disclosure: At the time of this writing, Louis Bedigian had no position in the equities mentioned in this report.
Louis Bedigian is the Senior Tech Analyst and Features Writer of Benzinga. You can reach him at louis(at)benzingapro(dot)com. Follow him @LouisBedigianBZ
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