Ruby Tuesday profit triples in fiscal 3rd quarter as costs decline

Ruby Tuesday 3rd-quarter profit more than triples

MARYVILLE, Tenn. — Ruby Tuesday Inc. on Wednesday said its fiscal third-quarter profit more than tripled despite lower sales, as the casual restaurant chain cut costs and improved profit margins.

For the three months ended March 2, Ruby Tuesday earned $17.8 million, or 28 cents per share, compared with $4.8 million, or 9 cents per share, in the corresponding period last year. The per-share results reflect a 24 percent increase in the number of shares outstanding from year to year.

The latest quarter’s results included closure and impairment expenses of $2.3 million, or 2 cents per share, compared with similar expenses of $14.3 million, or 17 cents per share, in the year-ago quarter.

Revenue fell 3.2 percent to $307.3 million from $317.5 million.

Analysts polled by Thomson Reuters, on average, expected profit of 23 cents per share on revenue of $303.7 million.

Ruby Tuesday blamed harsh winter weather for a 0.7 percent drop in sales at company-owned restaurants open at least a year. Sales at U.S. franchised restaurants open at least a year fell 5.3 percent.

Sales at locations open at least a year is a key performance metric because it measures growth from existing locations rather than newly opened ones.

The company closed 11 restaurants during the quarter. Franchisees closed three restaurants and opened one.

Ruby Tuesday cut costs for payroll and other operating expenses, and paid less for supplies. Total operating costs dropped 7.6 percent to $281.4 million from $304.7 million.

Ruby Tuesday expects earnings for the fiscal year in a range of 60 cents to 65 cents per share.

Analysts, on average, expect profit of 63 cents per share for the fiscal year.

Shares of Ruby Tuesday closed Wednesday up 39 cents, or 3.5 percent, at $11.64, just off a 52-week high of $11.67 reached during the day’s trading session. The stock has ranged from $3.76 to $11.25 over the past year.