HEATHROW Fla. Ruth’s Hospitality Group Inc. reported Friday a third-quarter net loss almost double that of the same quarter last year, as sales were hurt by consumers who continued to trade down to cheaper meals than that of an upscale steakhouse, or who decided to stay at home.
The parent to Ruth’s Chris Steak House and Mitchell’s Fish Market booked a loss of $954,000, or 4 cents a share, for the quarter ended Sept. 27, compared to a loss of $520,000, or 2 cents per share, in the same quarter last year.
Latest-quarter revenue fell 21 percent to $77.8 million.
“We continue to face challenges related to consumer spending and third-quarter results underscore that fact,” said Michael O’Donnell, president and chief executive of Ruth’s Hospitality, which operates or franchises 150 restaurants, which also include the Mitchell’s Steakhouse and Cameron’s Steakhouse concepts.
Same-store sales fell 24 percent at corporate Ruth’s Chris Steak House units and fell 12.3 percent at corporate Mitchell’s Fish Market stores.
In a conference call with investors, O’Donnell said: “Rebuilding sales momentum in this environment continues to be our priority and we are working hard to connect with consumers.”
He said the company is attempting to increase guest frequency through its “Ruth’s Classics” promotion, which allows customers two price points for a three-course meal. A $39.95 option features one of four entrées, and a typical order would be a six-ounce filet with shrimp, a personal side and a dessert. An upgrade option is available for $49.95, and that features products like the chain’s 16-ounce ribeye.
O’Donnell said Ruth’s Classics now represent about 30 percent of its guest’s ordering preferences, and the mix between the two price points is about equal.
The value promotion “is having only a modest impact on our average guest check, which was down approximately 3.3 percent, to $69.48, from the prior year.”
Ruth’s also sees private dining as having potential to grow sales. The company this summer installed satellite meeting capabilities in more than 100 Ruth’s Chris and Mitchell’s Fish Market dining rooms.