Is it just coincidence, or do companies plan things this way? While I'm watching a new slew of Ruby Tuesday (NYSE:RI) commercials circulating on the tube (the ones for the little mini-burgers), I'm also hearing from Yahoo! that Ruby Tuesday's due out with fiscal Q3 2006 earnings numbers tomorrow. Now, I can't tell you much about the burgers, but here's what we know about the company that makes them.

Wall Street Wisdom:

  • General consensus. Ten analysts follow Ruby Tuesday, and opinions are split right down the middle: five buys, five holds.
  • Revenues. Analysts expect to hear that quarterly sales grew 16% year over year, to $334.2 million.
  • Earnings. Profits are only expected to climb 10%, however, to $0.46 per share.

Margin watch:
Is there a reason the song says, "Goodbye, Ruby Tuesday," and not the title you see above? Perhaps there is. The company's rolling gross margins have been on a long, slow slide over the past 18 months. Meanwhile, operating and net margins are headed downhill at a much faster pace, leaving Ruby 28% less profitable last Tuesday than it was on that same Tuesday a year and a half ago.

Margins %

8/04

11/04

3/05

5/05

8/05

11/05

Gross

74.8

74.7

74.5

74.4

74

73.8

Op.

17.1

16.4

15.4

14.4

12.9

12.3

Net

10.8

10.4

9.8

9.2

8.2

7.8
All data courtesy of Capital IQ, a division of Standard & Poor's. Data reflects trailing-12-month performance for the quarters ending in the named months.

Foolish lookout:
I don't buy the theory that all industries go through cycles that their members are powerless to fight. Housing, autos, semiconductors? Maybe. But restaurants? Sorry, but the numbers just don't bear that out. Last week, for example, fellow Fool Stephen Simpson described a quarter of strong comparable sales and rising profits at Darden (NYSE:DRI). But next door, at rival Applebee's (NASDAQ:APPB), the news was of full-year 2005 operating margins falling from 16.9% to 14.6%, despite comparable sales rising 1.8%. And three doors down at Brinker (NYSE:EAT), strong comparable sales have the company raising guidance for its fiscal Q3 2006. (Brinker will report its fiscal Q3 numbers late next month.)

With results so diverse, there are clearly differences among these companies. Some are more in fashion than others. Some are better run than others. So far, Ruby Tuesday appears to be neither of the above. Let's hope the little burgers help out tomorrow.

Fool contributor Rich Smith does not own shares of any company named above.