WINTER PARK, Fla. (AP) -- The owner of Ruth's Chris Steak House said Friday that second-quarter net income fell by nearly a third because of a tax benefit a year ago. But absent that, the restaurant company's performance topped analyst expectations as higher customer traffic and prices drove up sales.
Shares jumped 75 cents, or 13 percent, to $6.50 in morning trading.
Still, Ruth's Hospitality Group Inc., while also owns the Mitchell's Fish Market chain, cautioned that rising costs for beef were a challenge. During the quarter, its total costs rose 6 percent. Food and beverage costs jumped 32 percent, driven by climbing beef prices.
Soaring prices for corn and other grains used as animal feed have driven up beef prices. The government predicts that beef prices will jump 4 to 5 percent next year because of the drought that has ravaged crops this summer.
In the three months ended June 24, Ruth's net income came to $5.8 million or 17 cents per share, down 31 percent from $8.5 million, or 20 cents per share, during the same period a year ago. Last year's quarter included a $4.4 million tax benefit.
Analysts expected earnings of 13 cents per share for the most recent quarter, according to a FactSet poll.
Revenue rose 6 percent to $97.7 million from $92 million. Wall Street predicted $95.1 million.
For the high-end Ruth's Chris Steak House chain, increased traffic and higher prices for entrees lifted an important revenue metric 6 percent. At Mitchell's Fish Market restaurants, that figure rose 2 percent, also thanks to higher prices. These revenue measures exclude results from locations that have recently opened or closed, which can skew ongoing trends.
Ruth's revenue from franchised restaurants, a much smaller part of its business, rose 13 percent to $3.2 million. There are 69 franchised Ruth's Chris Steak House restaurants.
The Winter Park, Fla., company owns 63 Ruth's Chris Steak House restaurants and 19 Mitchell's Fish Market locations and a handful of other restaurants.