Ruby Tuesday Reports Positive Same-Restaurant Sales And Buying Back of Franchise Restaurants

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Ruby Tuesday, Inc (NYSE:RT)rose 6.61% in the last two trading sessions on the Company’s reporting of strongest quarterly sales percentage in almost five years for the second quarter fiscal 2011 on January 5, 2011.

Shares of the Company gained $0.83 to trade close at $14.84 after second quarter reporting and had market capitalization of $962.42 million on 64.85 million outstanding shares. The Company has grown 93.99% in the last one year trading and its shares are currently trading above its 50-Day Moving Average and 200-Day Moving Average of $13.48 and $11.41.

The owner of the Ruby Tuesday casual dining restaurants posted positive same-restaurant sales of 4.2% for the second consecutive quarter. Net income generated in the second quarter was $0.07 per diluted share as compared to net earnings of $0.01 per share posted in the corresponding quarter last year which ca be directly correlated to RT’s  repositioning efforts and strategic investments in its menu offerings.

Operating margin for the quarter improved by 140 basis points to 15.1% with a 6.2% increase in the revenues earned of $290.451 million from previous year’s revenues of $273.464 million. A 1.6% increase was observed in the Company’s same-restaurant sales for domestic franchised restaurants with the total sales at domestic and international franchise Ruby Tuesday restaurants being $79.9 million.

Ruby Tuesday projects FY 2011 earnings per share in the range of $0.76-$0.86 along with a relatively flat same-restaurant sale of 2% and a flat operating margin. The company estimates to expend $29-$33 million in capital expenditure for the buy back of additional franchise restaurants over the remainder of the fiscal year apart from the 20 franchise restaurants acquired during the first fiscal quarter and three restaurants acquired in the second quarter. During the quarter RT had negotiated a new five-year, $320 million revolving credit facility which closed on December 1, 2010.

Ruby Tuesday, Inc., including its wholly owned subsidiaries (RTI) owns and operates Ruby Tuesday casual dining restaurants. The Company-owned and operated restaurants are concentrated in the Northeast, Southeast, Mid-Atlantic and Midwest regions of the United States. Continue @

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