Ruby Tuesday, Inc. (RT) Reports In-Line Q2 EPS

Ruby Tuesday, Inc. (NYSE: RT) reported Q2 EPS of ($0.15), in-line with the analyst estimate of ($0.15). Revenue for the quarter came in at $262.7 million versus the consensus estimate of $268.4 million.

Same-restaurant sales decreased 1.0% at Company-owned Ruby Tuesday restaurants compared to the same quarter of the prior year. Same-restaurant guest counts at Company-owned Ruby Tuesday restaurants were down 1.3% compared to the same quarter of the prior year.

As previously disclosed, we are not providing quarterly or annual earnings guidance for fiscal 2015. There are, however, certain items which we would like to highlight, including the following:

Third Quarter Outlook

• Same-Restaurant Sales – We estimate same-restaurant sales for the third quarter to be -2% to +1%.

Annual Outlook

• Same-Restaurant Sales – We estimate same-restaurant sales for the fiscal year to be -1% to +1%. The guidance for the year is revised from prior guidance of +1% to +2%.
• Restaurant-level Operating Margin – Estimated to be 16.0% to 17.0% of restaurant sales compared to 15.1% in fiscal 2014. The improvement is primarily due to decreases in cost of goods sold, payroll and related costs, and other restaurant operating costs associated with cost savings initiatives.
• Selling, General, and Administrative Expense – Estimated to be $127 to $130 million compared to $137.2 million in fiscal 2014. The reduction is primarily due to $5.3 million in costs incurred in 2014 for corporate restructuring and executive transition costs, and an additional $3.5 million in savings resulting from our 2014 cost reduction initiatives. We estimate that marketing expense for this fiscal year will be lower than fiscal 2014.
• Restaurant Development – During the year, we plan to open one new Company-owned Ruby Tuesday restaurant and expect to close 10 to 13 Company-owned Ruby Tuesday restaurants. Domestic franchisees expect to open two Lime Fresh restaurants and close one Ruby Tuesday restaurant. International franchisees expect to open five to eight and close three Ruby Tuesday restaurants.
• Tax – We are limited as to the amount of tax credits we can use each year based upon our taxable income for that year and cannot recognize a full benefit of any year’s currently generated tax credits or our tax credit carryforwards due to our deferred tax valuation allowance, which will remain until we generate sufficient levels of pre-tax income in the future.
• Capital Expenditures – Estimated to be $28 to $32 million for the year.
• Excess Real Estate – We expect to generate $8 to $12 million of cash proceeds for the year from the disposition of excess real estate.

For earnings history and earnings-related data on Ruby Tuesday, Inc. (RT) click here.

You May Also Be Interested In

• Tesla touts acceleration of new models, but Q1 results fall short of estimates
• Equity Residential (EQR) Tops Q1 EPS by 44c; offers guidance
• Stride Inc. (LRN) Tops Q3 EPS by 17c, provides guidance