MARYVILLE Tenn. Ruby Tuesday Inc. said last month it would shutter nearly 10 percent of its domestic corporate restaurant system and book as much as $55 million in charges. —Looking to improve operating results that have suffered for more than two years,
During the company’s current February-ending third quarter, 40 locations will be closed, and during the next several years an additional 30 units will be shuttered, the company said. —Looking to improve operating results that have suffered for more than two years,
The Maryville, Tenn.-based Ruby Tuesday operates or franchises 942 restaurants worldwide, including 714 U.S.-based locations that are run by the company. Based on the number of units, it is the third largest casual-dining chain behind Applebee’s Neighborhood Grill & Bar and Chili’s Grill & Bar. —Looking to improve operating results that have suffered for more than two years,
In its statement outlining the closures, Ruby Tuesday added that between 35 and 40 surplus properties also are marked for sale. These properties were undeveloped real estate assets the company had purchased and will now sell, said Steve Rockwell, Ruby Tuesday’s vice president of finance. —Looking to improve operating results that have suffered for more than two years,
Of the 40 restaurants earmarked for closure during the current quarter, a little fewer than half of the locations already have been shuttered, and the remaining restaurants will be closed this month, Rockwell added. The restaurant closures were spread throughout the system, he noted, although most of corporate Ruby Tuesday locations are east of the Mississippi River. —Looking to improve operating results that have suffered for more than two years,
According to securities analyst Brad Ludington at KeyBanc Capital Markets Inc. in Dallas, the initial group of 40 closed restaurants had produced an annual multimillion-dollar loss for the parent company. He estimated that the closures could add between 4 cents per share and 8 cents per share on an annual basis going forward, although continued lease payments will dilute that gain. —Looking to improve operating results that have suffered for more than two years,
“We view the decision as a positive for the company,” Ludington said, “as it indicates that management is actively seeking out opportunities to secure the long-term success of the Ruby Tuesday brand.” —Looking to improve operating results that have suffered for more than two years,
For the company’s latest fiscal year, which ended in June, net income fell 71.2 percent to $26.4 million, or 51 cents per share, from $91.7 million, or $1.59 per share, a year earlier. —Looking to improve operating results that have suffered for more than two years,
Latest-year revenue declined 3.5 percent to $1.36 billion. —Looking to improve operating results that have suffered for more than two years,
The casual-dining operation has struggled against slowed sales, increased costs from an ongoing renovation effort and high levels of debt during the past few years. During its latest quarter ended Sept. 2, the company posted the lowest quarterly profit ever since at least 1994, when public filings for Ruby Tuesday began. Same-store sales fell 10.8 percent at corporate restaurants and fell 7.9 percent at domestic franchised locations, following more than two years of negative quarterly same-store sales. —Looking to improve operating results that have suffered for more than two years,
Restructuring charges for the restaurant closures, including impairment and lease terminations or obligations, should total between $40 million and $55 million, the company said, and will be taken in both the November-ended second quarter and the current third quarter. —Looking to improve operating results that have suffered for more than two years,
The company said details would be given during its second-quarter conference call on Jan. 7. —Looking to improve operating results that have suffered for more than two years,
Ruby Tuesday added that it expected to remain compliant with bank covenants, which had been an issue for the company prior to a debt restructuring plan it closed last April that helped it avoid default. As of Sept. 2, the company held about $546 million in long-term debt, including capital leases. —Looking to improve operating results that have suffered for more than two years,
On top of the restructuring charges, Ruby Tuesday said it would take a $19 million, pretax, noncash charge for goodwill impairment in its second quarter. Goodwill impairment charges relate to the value of trademarks and other intangible assets, and the company said the write-down was based on “the poor overall economic conditions, declines in fair value, declining sales…and a challenging environment for the restaurant industry.” —Looking to improve operating results that have suffered for more than two years,