Ruby Tuesday: Ads, coupons boosted 1Q sales

Ruby Tuesday Inc. saw same-store sales increases of 1.9 percent at its company-owned Ruby Tuesday restaurants during its fiscal first quarter, the first positive sales results the company has experienced during its past seven quarters.

Chief Branding Officer and Executive Vice President Daniel P. Dillon attributed the rise in sales during the quarter ended Sept. 4 to a focus on television advertising for Ruby Tuesday, as well as a 30-percent reduction in coupon discounts.

“Going forward we believe this balance of national cable television and local spot weight in key markets, along with a base level of coupon incentives, will continue to deliver favorable same-restaurant sales results,” Dillon said.

Also during its first quarter, Ruby Tuesday added new chef-inspired menu items, including a chicken trio and Jamaican jerk shrimp, which came with fresh-baked garlic cheese biscuits and access to the salad bar, Dillon said. The company followed that promotion with a limited time steak and lobster dinner offer for $14.99, and a Mixed Grill promotion for $11.99.

“The Mixed Grill promotions scored very well in both concept and panel study taste tests, and we're confident it will maintain the traffic and sales momentum we're seeing in our business today,” he noted.

Greg Ashley, vice president of finance at Ruby Tuesday, said the company expects for same-store restaurant sales to be flat to an increase of 2 percent for the full fiscal year.

The Maryville, Tenn.-based company, which operates Ruby Tuesday, Lime Fresh Mexican Grill, and Marlin & Ray’s Seafood & Sunsets, reported net income of $2.6 million for the quarter, a 16-percent decrease from the previous year.

In addition, earnings per share dropped to 4 cents from 5 cents a year ago, and total revenue for the quarter increased 0.8 percent to $333.0 million from $330.3 million a year ago.

The company attributed some of the drop in net income, though not all, to its continued search for a new chief executive officer. Ruby Tuesday cofounder and chief executive officer Sandy Beall announced in June that he would be stepping down from his position. He will maintain control over the company until a successor is chosen.

“We have much work ahead of us. We know that,” said Beall. “We also feel that our business is very stable, more stable than it's been in a couple of years, and that gives us a certain sigh of relief, really. We believe the Ruby Tuesday brand is headed in the right direction.”

According to research firm Northcoast Research, Marlin & Ray’s continues to be the company’s full-service growth vehicle for converting under-performing Ruby Tuesday locations. Lime Fresh, which Ruby Tuesday acquired in April for $24 million, “provides the company with strong potential growth and financial returns in the fast-casual Mexican Segment.”

Beall said the company plans to grow both the Marlin & Rays and Lime Fresh brands during the next fiscal year.

Contact Erin Dostal at erin.dostal@penton.com.
Follow her on Twitter: @erindostal