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Ruth’s Company Restaurants Grow Traffic and Comps in Q2

Ruth's Chris Steak HouseRuth's Hospitality Group, Inc. (NASDAQ:RUTH) reported its unaudited financial results last week that show its company-owned same-restaurant sales are growing as are revenues from its franchising activities. Its 70 company-owned restaurants grew in same-restaurant sales by 2.9 percent compared to the second quarter of last year. Customer visits were up in company-owned restaurants by a strong 2.1 percent.

Ruth’s net income grew to $7.8 million for the quarter compared to $6.9 million during the second quarter of 2016.

At Ruth’s, franchises outnumber company-owned restaurants. By the end of June, Ruth increased to 81 franchised restaurants in total. That is one more franchise than the end of the second quarter of 2016. The upscale steakhouse chain grew by 3 company restaurants.The franchisor did not report on same-restaurant sales for its franchises, franchised restaurant traffic, or restaurant-level profits for its franchises. However, the income that Ruth derives from what franchisees pay it increased in the second quarter by 5.5 percent, or $4.3 million compared to $4.0 million in the second quarter of 2016.

The restaurant operator and franchise consultancy expects to see a franchised restaurant open in China, Hawaii and Indiana in 2017 and 2018.

Michael P. O'Donnell, chairman and chief executive officer of Ruth's Hospitality Group, Inc., noted: “Our sales momentum accelerated in the second quarter and was driven by a traffic increase of 2.1 percent. These positive traffic trends in the quarter also positively impacted our year-to date traffic, which now sits in positive territory. I am pleased with the continued superior execution from our team members and franchise partners which drove a 7.9 percent increase in total revenues and a 2.9 percent increase in company-owned comparable sales. This top line performance, combined with operating margin expansion and continued execution against our total return strategy, allowed us to generate a 13.6 percent increase in Non-GAAP earnings per share.”

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Don Sniegowski is editor of Blue MauMau, the daily news journal for franchise & small business owners. Call him at +1 (270) 321-1268, tweet @bluemaumau or email don@bluemaumau.org.