MARYVILLE Tenn. Ruby Tuesday Inc. reported on Thursday that it expects a net loss in its second quarter ended Dec. 4 as slumping sales and remodeling costs took a toll on the casual-dining company.
Preliminary results indicate that the company will post a per-share loss of between 18 cents and 21 cents, compared with a per-share profit of 28 cents in the year-ago second quarter.
Same-store store sales for the latest quarter fell 10.8 percent at corporate restaurants and 8.7 percent at domestic franchised units, the company said.
Ruby Tuesday, the operator or franchisor of 935 namesake restaurants, is in the middle of a major remodeling effort set to upscale its brand through decor, service and menu improvements. This year about 500 restaurants have been remodeled, Ruby Tuesday said. Costs from the revamp hurt second-quarter results by 7 cents per share.
Sandy Beall, founder and chief executive of Ruby Tuesday, noted that second-quarter results also was negatively affected by investments in its service system, food and value-pricing strategies, which the company rapidly changed last quarter to include more value-oriented pricing in addition to its more upscale remodeling efforts.
“We are nearly through a brand repositioning during which we have differentiated our brand from other bar and grill restaurants in both look and feel and upgraded our food, image, and service,” Beall said in a statement. “This is resulting in very high guest satisfaction scores for overall value, intent to revisit, and likelihood to recommend which we are convinced will better position our brand for the long term.”
Ruby Tuesday said it would report full second-quarter results on Jan. 9, after which the company will no longer report monthly same-store sales results until the end of each quarter.
Ruby Tuesday’s stock on Thursday fell more than 11 percent to close at $10.32.