Marilyn Hagerty Can’t Save Ruby Tuesday

Her reviews are informative and entertaining, and due to their viral nature they can even increase brand recognition, but Ruby Tuesday needs a lot more help than that.

Mar 15, 2014 at 7:06AM

Ruby Tueday


She has gone from an unknown to a legend in a matter of two years. How does one reach such status in this time-frame? By writing Olive Garden and Ruby Tuesday (NYSE:RT) restaurant reviews for the Grand Forks Herald, of course.

Her name: Marilyn Hagerty.

Her age: 87.

Her restaurant reviews: Viral. 

It doesn't matter who wrote a restaurant review when it goes viral. With millions of people reading these reviews, a positive or negative opinion will have at least a small impact on a restaurant's reputation and sales. However, will Hagerty's reviews be enough to give Ruby Tuesday at least a little much-needed life?

Critical opinions
Back in 2012, Hagerty wrote about Darden Restaurants' (NYSE:DRI) Olive Garden in her Eatbeat column. She referred to Olive Garden as "fashioned in Tuscan farmhouse style with a welcoming entryway" and stated that "the Chicken Alfredo ($10.95) was warm and comforting on a cold day." Many snooty food critics attacked Hagerty for her review. However, she was simply doing the same job she had done for three decades, and not looking for anything extra out of it. Her simple opinions resonated well with many people.

More recently, Hagerty reviewed Ruby Tuesday, and her review went viral. Ruby Tuesday needs more of a boost now than Olive Garden did back in 2012.

She visited Ruby Tuesday twice. She enjoyed the salad bar's great taste and good nutrition on her first visit. She also enjoyed the very hot, well-seasoned Baked Ravioli on her second visit. Readers get a kick out of her unintended humor, such as her appreciation for Ruby Tuesday's cloth-like napkins wrapped around silverware. This is exactly what leads to her restaurant reviews going viral, which then increases brand recognition for struggling restaurants like Ruby Tuesday. However, it's not likely that this brave and crafty senior citizen will have any long-term impact on Ruby Tuesday.

A few important numbers explain why.

Weak demand
Same-store sales, or comps, exclude new restaurant openings over the past year. Therefore, they provide a better way to see the demand picture than revenue does.

On a year-over-year basis in the second quarter, comps declined 7.8% at company-owned restaurants and 5.3% at franchise restaurants. Furthermore, guest counts declined 6.3%. Ruby Tuesday will point to this as a sequential improvement over the first quarter when guest counts slipped 10.8%. However, terrible to bad still isn't good.

Ruby Tuesday wants to become "more casual, energetic, and broadly appealing" going forward, but this initiative isn't nearly specific enough to give investors increased confidence in the company's future prospects.

Ruby Tuesday has added pretzel burgers, flatbreads, and hand-breaded chicken tenders to its menu. Changing menu items gives Ruby Tuesday potential, but the biggest headwind for casual dining is the value-conscious consumer. Therefore, price points must be on the money, which isn't easy.

For the second quarter, the net loss came in at $34.7 million versus a loss of $4.2 million in the year-ago quarter. Ruby Tuesday plans on cutting costs, but that's a broad statement and it's easier said than done.

An aging brand
Ruby Tuesday is an old brand, at least in consumers' eyes. Casual dining isn't what it used to be, and Ruby Tuesday doesn't offer diversification like that of some of its peers. For instance, Darden owns several brands which include Olive Garden, LongHorn Steakhouse, The Capital Grille, Bahama Breeze, Seasons 52, Eddie V's Prime Seafood, and Wildfish Seafood Grille. While DineEquity (NYSE:DIN) only owns Applebee's and IHOP, this at least gives the company more room for maneuverability with marketing and innovation.

Darden and DineEquity also provide investors some ease by offering dividend yields of 4.30% and 3.60%, respectively. Ruby Tuesday doesn't pay a dividend.

The Foolish takeaway
Ruby Tuesday might be a turnaround story, but why take the chance? Investors are likely to be much safer in Darden and DineEquity. If you're looking for a restaurant that's growing, then you should strongly consider looking in the fast-casual space, not in casual dining.

Unfortunately for Ruby Tuesday, Marilyn Hagerty's reviews aren't going to change consumers' minds. The majority of them want fast-casual, which offers clean and comfortable atmospheres, higher-quality food than fast-food, and more affordable prices than casual dining. Please do your own research prior to making any investment decisions. 

Some much better investment options.... 
It's no secret that investors tend to be impatient with the market, but the best investment strategy is to buy shares in solid businesses and keep them for the long term. In the special free report "3 Stocks That Will Help You Retire Rich," The Motley Fool shares investment ideas and strategies that could help you build wealth for years to come. Click here to grab your free copy today.


Dan Moskowitz has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. 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. The Motley Fool has a disclosure policy.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.


Compare Brokers