Ruby Tuesday (RT) Reports In-Line Q3 EPS, Revenue Beats, Offers Outlook

Ruby Tuesday, Inc. (NYSE: RT) reported Q3 EPS of ($0.07), in-line with the analyst estimate of ($0.07). Revenue for the quarter came in at $295.6 million versus the consensus estimate of $284.61 million.

Same-restaurant sales decreased 1.9% at Company-owned Ruby Tuesday restaurants and decreased 2.2% at domestic Ruby Tuesday franchise restaurants compared to the same quarter of the prior year.

Fourth Quarter Outlook

"As we discussed on our fourth quarter fiscal 2013 earnings call, as a result of a number of strategic initiatives we are implementing to reposition our brand, combined with the challenging casual dining environment, we are not providing earnings guidance. There are, however, certain items we would like to highlight, including the following:

• Same-Restaurant Sales – We anticipate same-restaurant sales for the fourth quarter to be down 1.0% to up 1.0%.
• Restaurant Closings – We plan to close approximately six to nine additional Ruby Tuesday restaurants during the fourth quarter, for a total of 30 to 33 closures in the second half of this year, in connection with the previously announced plan. In conjunction with the closing of these restaurants, we expect to incur a charge in the range of $2.5 to $3.5 million in the fourth quarter for lease reserves and other closure related costs.
• Tax Credits – We do not anticipate recognizing a benefit from FICA Tip and Work Opportunity Tax Credits generated during fiscal 2014. The historical income tax benefit from these tax credits has been $2.2 to $2.4 million per quarter. As was the case in our third quarter, further taxable losses in fiscal 2014 would result in additional tax credit deferred tax valuation allowances above historical levels as credits previously utilized in prior years would become limited due to the carryback of fiscal 2014’s net operating loss to those years.
• Capital Expenditures – Estimated to be $7 to $10 million in the fourth quarter and approximately $30 to $33 million for the year.
• Excess Real Estate – In the fourth quarter, we expect to generate $2 to $4 million of cash proceeds from the disposition of excess real estate and $13 to $15 million for the year.

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

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