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Ruth's Chris says casual slowdown dampens 2-Q revenues

HEATHROW, Fla. Ruth's Chris Steak House, Inc. said the spending slowdown hampering most of casual dining has held the steakhouse company's second-quarter revenues to between $76.9 million and $77.1 million, below analysts' consensus projection of $78.1 million.

The company's diverse customer base is exposing it to the same macroeconomic pressures afflicting other restaurateurs, chairman, president and chief executive Craig S. Miller said in a statement. Many casual-dining chains have attributed the segment's sluggish sales to rising fuel costs, higher mortgage payments and concerns about sliding home values. However, higher-ticket players in the segment had reported faring better than lower-priced brands, and grill-and-bar concepts in particular. Ruth's competes at a higher strata of the market.

Craig said that cost controls and efficiencies should preserve Ruth's restaurant-level profitability.

The company posted revenues of $60.5 million for the second quarter of 2006.

Sales at company-operated restaurants increased year-over-year by 28.4 percent, to $73.6 million, for the quarter ended June 25, versus $57.4 million for the same period of last year. The increase was driven chiefly by having 13 additional restaurants in operation, the company said.

Adjusted sales at restaurants open for at least a year rose during the most recent quarter by 1 percent, which reflected a 4.1 percent increase in the steakhouse chain's average check and a 3 percent hike in menu prices. The company noted that traffic increased at its bars and lounges.

During the quarter, Ruth's opened a restaurant in Anaheim, Calif., and Biloxi, Miss. The Biloxi steakhouse had been delayed two years by the aftermath of Hurricane Katrina.

Earlier this year,  Miller said the company planned to add 15 to 17 restaurants during fiscal 2007, after opening its 100th restaurant in December.

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