Published: Sat, August 13, 2016
Economy | By Melissa Porter

Goodbye, Ruby Tuesday? Chain to close 95 restaurants

Goodbye, Ruby Tuesday? Chain to close 95 restaurants

The company is expected to shutter 95 "underperforming" restaurants by September. Ruby Tuesday's operates 724 restaurants.

Buettgen said employees at the affected locations will be offered positions at nearby restaurants where possible.

Total revenue for the chain dropped by 5.9 percent last quarter to $279.3 million.

Michael Ellis, who joined Ruby Tuesday as chief development officer earlier this year, said he spent the past five months analyzing "each restaurant in every market to determine the optimal most profitable footprint for the Ruby Tuesday brand".

Shares of Ruby Tuesday (RT) were lower by 12.33% to $3.27 in after-hours trading on Thursday after the Maryville, TN-based restaurant chain posted 2016 fourth-quarter results that missed analysts estimates. Other measures include a revamped menu and improved salad bar, which the company had previously announced. However, it also opened one corporate-owned location domestically and one franchised location internationally. "While the decision to close restaurants has been extremely hard, it is a necessary step as we take aggressive actions to strengthen our organization". Same-restaurant sales fell 3.7%. The closures will make up about 13 percent of the total.

The company could potentially add another five to 10 closures as leases expire, Briley said.

Additionally, closure and Impairment expense was $43.8 million primarily due to the announced restaurant closures, compared to $4.0 million a year ago.

For the newly-started fiscal year, the company expects to earn 5 cents to 9 cents in adjusted earnings per share, with an extra week boosting per-share profit by 2 cents.

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