Ruby Tuesday (RT) Misses Q4 EPS by 1c, Guides FY17 EPS Below Consensus

Ruby Tuesday (NYSE: RT) reported Q4 EPS of $0.10, $0.01 worse than the analyst estimate of $0.11. Revenue for the quarter came in at $279.3 million versus the consensus estimate of $285 million. Comps declined 3.7%.

GUIDANCE:

Ruby Tuesday sees FY2017 EPS of $0.05-$0.09, versus the consensus of $0.13.

Fiscal Year 2017 Financial Outlook

The Company is providing full-year Adjusted Net Income per share guidance of $0.05 to $0.09. Pre-tax charges related to the Asset Rationalization Plan and as outlined in this release are excluded from Adjusted Net Income per share guidance. The Company notes that fiscal year 2017 is a fifty-three week period ending June 6, 2017 compared to a fifty-two week period in fiscal year 2016 and expects the fifty-third week impact on Adjusted Net Income per share to be approximately $0.02. Fiscal year 2017 guidance is based on the following assumptions:

• Same-Restaurant Sales – Fiscal year 2017 same-restaurant sales of flat to up 2% for the comparable fifty-two week period ending May 30, 2017.
• Unit Development – A net reduction of 95 corporate-owned Ruby Tuesday restaurants as part of the Asset Rationalization Plan with the potential of an additional 5 to 10 closures as leases expire.
• Restaurant Level Margin* – Fiscal year 2017 restaurant level margin of 17.8% to 18.4%.
• Selling, General, and Administrative Expense – Fiscal year 2017 SG&A ranging from $108 million to $112 million.
• Tax Rate – Adjusted Net Income is calculated using the statutory tax rate of 39.69%. This provides a more consistent tax rate to facilitate review and analysis of the Company’s financial performance. The Company is limited in the amount of tax credits that can be utilized each year based upon taxable income for that year and cannot recognize a full benefit of any year’s currently generated tax credits or tax credit carry-forwards due to the Company’s tax valuation allowance.
• Capital Expenditures – Fiscal year 2017 capital expenditures ranging from $38 million to $42 million.

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

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