Ruby Tuesday Shares Plunged: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of restaurant operator Ruby Tuesday (NYSE: RT  ) appear to have gotten severe food poisoning from a serving of company earnings yesterday. The stock groaned its way down as much as 17% in intraday trading today.

So what: Results for the company's fiscal fourth quarter were u-g-l-y, and it didn't have ... OK, so it did have an alibi, but it wasn't particularly convincing. Management said that severe winter weather affected its results more than competitors because of Ruby Tuesday's concentration on the Eastern part of the country. In addition, new investments hurt the bottom line. What investments, you ask? A prime one cited was the company's new "fresh bread program." So, perhaps we can blame it on the grain. (Rimshot!)

Earnings per share for the quarter -- excluding accounting gains and losses -- were $0.24, versus $0.28 last year and analyst estimates of $0.31.

Now what: The view ahead wasn't any more encouraging than the view looking back. At the top end of the guidance range, the company sees same-store sales growing 1% for the full year, and it expects that margins will remain flat. (There's that darn bread again!) Management provided an EPS range of $0.74 to $0.82, which trails the $0.90 that Wall Street expected.

Want to keep up to date on Ruby Tuesday? Add it to your watchlist.

Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.                                           

Fool contributor Matt Koppenheffer does not have a financial interest in any of the companies mentioned. You can check out what Matt is keeping an eye on by visiting his CAPS portfolio, or you can follow Matt on Twitter @KoppTheFool or on his RSS feed. The Fool's disclosure policy prefers dividends over a sharp stick in the eye.


Read/Post Comments (0) | Recommend This Article (5)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

DocumentId: 1472027, ~/Articles/ArticleHandler.aspx, 7/29/2014 9:21:08 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement