Ruby Tuesday posts big 1st-quarter profit jump

Ruby Tuesday posts big jump in 1st-quarter profit as cost cutting offsets falling sales

• On 4:50 pm EDT, Wednesday October 7, 2009

MARYVILLE, Tenn. (AP) -- Casual dining chain Ruby Tuesday Inc. said Wednesday its fiscal first-quarter profit shot up dramatically despite lower sales, as cost saving measures kicked in and interest costs fell after debt payments.

The results topped Wall Street expectations, but the company issued a weak forecast for the year and shares gained just slightly in aftermarket trading.

For the three months ended Sept. 1, Ruby Tuesday said its profit rose to $6.1 million, or 11 cents per share, compared with earnings of $285,000, or a penny per share, in the corresponding period a year ago.

The per-share results reflect a 9 percent increase in the number of outstanding shares year over year.

Revenue fell 7 percent to $300.6 million, from $324 million last year.

Analysts polled by Thomson Reuters, on average, expected profit of 9 cents per share, on revenue of $296.9 million.

The company attributed the sales decline to operating 45 fewer restaurants this year. It said customer count was up in the quarter, but same-restaurant sales fell 3.1 percent. The figure is an important measure of restaurant health because it measures growth at existing stores rather than from expansion.

Sales at domestic and international franchise stores totaled $94.8 million, down 5 percent from $99.7 million last year.

Ruby Tuesday said operating costs dropped 8 percent to $287.8 million, while interest expenses fell 45 percent to $5.4 million as the company paid down $107 million in debt.

No new company-owned restaurants will be opened this fiscal year, Ruby Tuesday said, and 15 are projected to close when their leases expire. The company expects six franchise restaurants to open, including three international stores.

Same-retaurant sales are expected to continue to fall, in the range of 1 percent to 3 percent.

The company forecast profit for the year in the range of 50 to 60 cents per share. That puts analysts' projection for full-year profit of 57 cents per share within range.

Ruby Tuesday shares closed flat at $7.91 then added 9 cents to $8 in aftermarket electronic trading.

Buzz up!