resultsareus said that the parking lots were full.
The parking lot at the Darien, Connecticut Red Lobster sure wasn't full or they would not have just closed their doors.
So it hit a 52 week high.
As the CEO of Ruby Tuesday said "advertising will play an increased role in driving same-store sales, especially during times like these when we believe there are fewer customers in our category being chased by increased advertising dollars and promotional messages."
That explains why the same store sales were down at competitor EAT in November and up less than 1% at competitor OSI.
I am looking forward to the earnings release next week because when investors see that the sales at DRI are no better than RI's, OSI's, and EAT's there will be a selloff. You do not keep a 20 P/E with a very small sales increase. There might even be a sale decrease as RI has experienced for the last 3 months in a row.
Also when management looks to the future they are seeing a huge increase in what they have to pay for shrimp as China and Vietnam are both having to start paying duties in January and 4 other countries will probably follow (Thailand, Brazil, Ecuador, and India). The price was down 28% and it could go back up 20% or more in January. Red Lobster's big promo was "endless shrimp" and that is history.
increased advertising dollars and promotional messages.
Ruby Tuesday Chief Executive Sandy Beall said "same-store sales dropped for three straight months -- down 8.9 percent in September, 8.7 percent in October and 8.1 percent in November. Advertising will play an increased role in driving same-store sales, especially during times like these when we believe there are fewer customers in our category being chased by increased advertising dollars and promotional messages."
Fewer customers to advertise to means a slight increase or the same amount of sales if you are doing "better" than the average restaurant chain. Ruby Tuesday said late Wednesday that total sales tumbled 8.6 percent while sales at restaurants open longer than a year dropped 5.1 percent. EAT (Brinkers) reported lower same-store sales in November yesterday and OSI's November sales were up less than 1% and APPB's were up 4%. Even a 1% to a 4% increase can not sustain a stock like DRI with a 20 P/E. DRI is too pricey.
EAT and OSI Competitors of DRI:
If you want a overpriced stock check out WYNN: Wynn Resorts. No doubt it is going to be the premiere destination in Las Vegas because of Casino Mogul Steve Wynn but it has a market cap of over 6 billion and has no revenues or anything, the resort won't open until spring of this year. The stock has gone from 13 to 62 in the past year. If you want to talk about overvalued stocks than I suggest you look somewhere else. DRI is a value stock at these prices.
Let's be real here. The parking lots are fuller and not full. They should be or the entire top level management at RL should be fired. Frankly comping over the pathetic numbers DRI should be above 5% comps. IF they are not then there is something still drastically wrong. I wonder results do actually see how long the lots stay full or do you just drive by at 7 PM for your stunning analysis. Anedocal stories mean nothing compared to an aggregate number of an earnings statement. But by all means go drive by if it makes you feel better.
Then again wasn't last year people saying they rather have less guests paying a higher price on this board?
Please give me a break.
Long resultsareus said in post 5688, "Again, we will see an increase in gross sales month over month and a large increase (3-4%) over last year. IMO."
I do not think that the sales will be up even 3 to 4% higher as resultsareus said but assuming that they were, DRI would not maintain a 20 P/E never mind the 30 P/E you mentioned.
Ruby Tuesdays November sales were down significantly. Same-store sales at company-owned restaurants dropped 8.6 percent, while same-store sales at domestic Ruby Tuesday franchises were down 5.1 percent. Brinkers (EAT) sales were down in November and OSI's November sales were up less than 1%. The restaurant industry is hurting and that includes DRI.
If you would have been paying attention over the last 2 years you would know about all the steps they have been taking in closing bad stores. If you are short this stock, I won't feel sorry for you one bit when the sales for RL, OG and the rest are huge. I would hate to be in your shoes next week, you should seriously re-think your thoughts because they are wrong. We only have to wait one week to prove how wrong you are.
Feel sorry for you man.
You will not have to feel sorry for me.
Ruby Tuesday's quarter was way off. Competitors Brinkers (EAT) sales were down in November, CAKE was recently downgraded, OSI November sales were up less than 1%, APPB's about 4%. DRI has about a 20 P/E and floundering sales at its competitors is not exactly a good omen for DRI. To sustain a 20 P/E, DRI should be growing 10% to 20% a year and if it is like its competitors DRI sales are not that good.
The endless shrimp promotion at Red Lobster is over and shrimp prices are going up probably between 20% and 30% in January as duties are being placed on China and Vietnam and up to 4 more countries. I do not see much growth coming out of DRI. Slow sales at its competitors, slow retail sales in general, and increasing initial claims for unemployment should give you a clue that economy is not booming.
Duties on shrimp are being initiated in China and Vietnam and pssibly 4 other countries: