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Ruby Tuesday dives in pre-market as quarterly revenues fall again
Shares in Ruby Tuesday Inc (NYSE:RT) dipped in pre-market trading on Friday as the struggling restaurant chain reported its nineteenth straight quarter of revenue decline.
The weak performance was hardly unexpected given that the group bemoaned changing consumer habits and rising competition only a month or so ago.
Ruby Tuesday – which said in March it was considering putting itself up for sale – saw like-for-like sales drop 4% in the three months to end February.
Revenues also slumped by 17% to US$225.7mln in the quarter, during which more than 100 stores were closed.
Net loss for the period widened significantly to US$19.8mln, or US$0.33 a share, compared to a loss of US$3.1mln, or US$0.05 a share for the same quarter a year earlier.
“The casual dining environment remains highly challenging, promotional, as well as price competitive and our sales trends are reflective of these conditions,” the company said.
The stock has been on a downward trend for five years now and, like several of its competitors, has suffered from reduced foot fall and sales as fewer people dine out.
In fact, share have almost halved in the past 12 months alone.
The unfortunate combination of lower food costs and higher staff expenses is making it difficult for firms like Ruby Tuesday to compete with supermarkets and the eat-at-home option.
In the final quarter of 2016, sales at chain restaurants open for at least 18 months dropped 2.4%, the worst quarterly performance for years.
In December alone, a key period for the retail and food industries, sales plunged 4.3%; the poorest monthly showing since 2013.
The stock fell more than 5% in the pre-market to US$2.80, giving the company a market value of a little over US$180mln.
Story by ProactiveInvestors
Source: http://www.proactiveinvestors.com/companies/news/176161/ruby-tuesday-dives-in-pre-market-as-quarterly-revenues-fall-again-176161.html
