RUBY TUESDAY, INC. $7.72 New York symbol RT

RUBY TUESDAY, INC. $7.72 (New York symbol RT; TSINetwork Rating: Speculative) (865-379-5700; www.rubytuesday.com; Shares outstanding: 61.4 million; Market cap: $502.6 million; No dividends paid) owns 679 casual dining restaurants in the U.S., with franchisees operating 31 in the U.S. and 45 overseas. The company also runs 20 Lime Fresh restaurants and franchises eight (six domestic and two international).

In the three months ended March 4, 2014, Ruby Tuesday’s sales fell 3.8%, to $295.6 million from $307.4 million a year earlier. Same-restaurant sales declined 1.9%. Continued weak consumer spending was the main reason for the decline. As well, the company closed less-profitable restaurants in the quarter, and competition remains intense in the casual-dining business.

Excluding one-time items, Ruby Tuesday lost $4.5 million, or $0.07 a share, compared to a year-earlier profit of $6.3 million, or $0.10. That beat the consensus estimate of an $0.08-a-share loss.

The company’s new CEO, J.J. Buettgen, has a history of turning around well-established but underachieving restaurant chains. His plans for Ruby Tuesday include moving the company’s restaurants back to a casual bar and grill atmosphere and revamping the menu. Meanwhile, he has closed 30 underperforming restaurants and plans to launch a major new marketing campaign. But any turnaround involves a lot of risk.

Ruby Tuesday is still a buy, but for aggressive investors
only.

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