High-end restaurant company Ruth's Hospitality (RUTH -1.75%) reported earnings of $0.09 per share in the first quarter, missing by a wide margin the $0.29 per share analysts had been expecting. Revenue fell short too.
The owner of Ruth's Chris Steakhouse said the coronavirus pandemic hit business hard, and though the impact was felt late in the quarter, it still resulted in a significant drop-off in business that is spilling over into the second quarter.
No seat at the table
Ruth's Hospitality said the downturn began first with its franchised operations in Asia, but quickly spread globally, leading to the closure of all of its dining rooms. Where it could, it transitioned to its recently launched Ruth's Anywhere takeout and delivery program, but almost 40% of its restaurants, whether company-owned or franchised, were completely closed.
Indicative of the coming quarter, comparable sales in April plummeted 83.5% at company-owned restaurants that were open for takeout and delivery, and average weekly sales are just $19,200 per unit. Second-quarter average weekly sales last year were $102,600 per unit.
While Ruth's plans to reopen restaurants as permitted, it shows the difficulty chains face where results are based on the in-restaurant experience. Ruth's was fortunate to have been piloting its Ruth's Anywhere program, enabling it to pivot to takeout and delivery at some locations.
The steakhouse reported first-quarter revenue of $108.5 million, down 9.4%, which generated adjusted earnings of $0.09 per share compared to $0.45 per share a year ago.
Ruth's Hospitality also said it was suspending its quarterly dividend of $0.15 per share as well as its share buyback program.