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As Ruby Tuesday Continues to Lose Sales, It Considers Selling Company

Ruby Tuesday Inc. announced on Monday its financial results for both the fourth quarter and fiscal year, which ended June 6, 2017. Same-restaurant sales for the quarter declined by 1.6 percent compared to the same period last year. It declined by 3.1 percent in comparable sales for the entire year.

Jim Hyatt, president and chief executive officer, commented, “While the casual dining environment remains challenging and highly competitive, we are pleased to have achieved a sequential improvement in same-restaurant sales and operating performance for the fourth quarter as we had expected.”

The CEO is thankful that comparable sales hadn’t dipped even further.

“Our same-restaurant sales trend improved 240 basis points from a 4.0 percent decline in the third quarter to a 1.6 percent decline in the fourth quarter while we held our performance gap relative to the industry constant. Additionally, we reported adjusted net income for the fourth quarter following three quarters of adjusted net losses, as we have stemmed the decline in our top-line while controlling expenses.”

Ruby Tuesday Q4 and 2017 Financial Results

Q4 same-restaurant sales

-1.6%

2017 same-restaurant sales

-3.1%

2017 net loss

(106.1)

The general malaise in casual dining traffic and sales has hit Ruby Tuesday’s 560 restaurants in the United States, 17 of which are franchised. For the year, Ruby Tuesday had its revenue decline by 12.8 percent to $952 million. The company experienced a net loss for the year of $106.1 million. However, for its last quarter, Ruby’s only had a net loss of $8.7 million.

That is progress.

“Looking ahead to fiscal 2018, we expect to achieve year-over-year improvement in restaurant level margins and EBITDA,” said the CEO.

The company announced back in March that it is looking at a hotel sale or merger with a company in order to offload its problems and maximize value for its shareholders. Ruby Tuesday’s board said that as of August 21, it still is considering it. In a press release of its quarterly and annual results on Monday, the company declared that it is still considering a potential sale or merger, “and has retained UBS as its financial advisor to assist in the process.”

CEO Hyatt spoke about Ruby Tuesday’s more pressing needs to climb out of its doldrums. “Our top three priorities are to improve the total guest experience, ignite same-restaurant sales growth, and deliver system profitability,” said Hyatt. “We have developed a comprehensive strategy to realize these goals over the stated time frame and believe this game plan will position Ruby Tuesday towards achieving sustained profitable growth and increasing shareholder value.” 

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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.