NEW YORK (AP) -- Moody's Investors Service on Friday downgraded its rating for Ruby Tuesday Inc., saying the restaurant chain is doing worse than it had expected.
The rating agency lowered the company's corporate family rating one notch deeper into junk grade territory, to "B3." Its rating outlook is negative, suggesting that another downgrade may be in the near future. That could make it more expensive for Ruby Tuesday to borrow money.
Moody's said Ruby Tuesday may find it hard to fix its weak traffic trends given soft consumer spending and lots of promotions and discounts from its rivals.
Ruby Tuesday owns and franchises Ruby Tuesday and Lime Fresh restaurants.
The company posted a loss for its fiscal first quarter, which ran from June through August, citing a weak economy that is keeping customers away.
Shares of the Maryville, Tenn.-based company added 6 cents to close trading at $6.04 Friday. The shares are off 23 percent in 2013.