UPDATE: Ruby Tuesday (RT) Reports Q4 EPS of $0.06, Says Strategic Review Entering Final Phase

Ruby Tuesday (NYSE: RT) reported Q4 EPS of $0.06, versus $0.10 reported last year. Revenue for the quarter came in at $254.9 million, versus $279.32 million reported last year.

Same-restaurant sales (on a 13-week comparable basis) declined 1.6% compared to a 3.7% decrease in the fourth quarter of the prior fiscal year.

Strategic Initiatives

The “Plan to Win”

Ruby Tuesday has launched its “Plan to Win” to address its sales and operational challenges, improve financial profitability, and thereby enhance long-term value for shareholders. As the Company executes against this new strategy it expects to achieve year-over-year improvement in restaurant level margins and EBITDA in fiscal 2018. The “Plan to Win” is a road-map for the Company over the next 12 months and includes the following priorities:

Improve Total Guest Experience- Develop and rollout 9 to 12 months operations calendar to enhance operational excellence and support the marketing calendar- Deploy Operations and Restaurant Support Center platforms to drive performance- Focus on progressive improvement on all guest experience attributes
Ignite Same Restaurant Sales Growth- Develop 12 to 15 month marketing calendar to increase frequency of existing and new target guests- Drive improved ROI for marketing and media spending- Implement menu simplification and test & pilot new lunch menu- Re-energize To-Go and Catering Programs
Deliver System Profitability- Reconfigure and optimize G&A expenses- Deploy P&L benchmarking tool to drive accountability and enhance unit profitability- Optimize supply chain process for profitability

Asset Rationalization Plan

Ruby Tuesday is in the contract process to sell 21 properties with expected net proceeds of $28.2 million or approximately $1.3 million per location. During fiscal 2017, the Company completed sales for 13 properties that closed as a result of the Asset Rationalization Project and received $20.1 million in net proceeds. Also during fiscal 2017, the Company has settled 32 of the 61 leased properties closed as a result of the Asset Rationalization Plan for approximately $8.4 million.

Review of Strategic Alternatives

On March 13, 2017, the Company announced that its Board of Directors had authorized an exploration of strategic alternatives in order to maximize shareholder value. The Board of Directors is considering all strategic alternatives including, but not limited to, a potential sale or merger of the Company, and has retained UBS as its financial advisor to assist in the process.

As of August 21, 2017, the strategic alternatives review process is ongoing and entering its final phase. The Board is focused on the completion of this process and remains dedicated to delivering value to its customers, franchisees, employees, and shareholders to better position the brand to achieve top line growth and higher operating profitability.

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

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