Shares of Ruth's Hospitality Group (RUTH 0.79%) tumbled just over 13% Friday after the owner of the high-end Ruth's Chris Steakhouse reported second-quarter earnings showing revenue missed analyst forecasts, though it managed to beat bottom-line estimates.
Because Ruth's restaurants did not have much, if any, of a takeout or delivery operation in place until late into the pandemic -- an upscale restaurant is best experienced in the restaurant, not in plastic doggie trays -- sales collapsed during the crisis.
Revenue plunged 74% to $28 million in the second quarter, a far cry from the $110 million it generated a year ago. Similarly, what had been a non-GAAP $0.31 per-share profit last year swung more than 180 degrees to a $0.48 per-share loss, albeit better than the $0.50 per-share loss Wall Street was expecting.
By the end of June, Ruth's Hospitality had reopened 71 of its 81 restaurants, or 88%, with 59 offering capacity-restricted seating, helping the high-end steakhouse accelerate sales growth for the month.
Where comparable sales had fallen 80% or more during the first two months of the quarter, the decline eased to 54% in June. And where average weekly sales per open restaurant had withered away to just $19,000 in April and over $30,000 in May, it doubled to $60,000 in June.
Despite improvements, Ruth's Hospitality expects to have a cash burn of $1 million per week in the third quarter.