Shares of Ruby Tuesday (NYSE:RT) opened higher this morning, after the casual-dining chain posted better-than-expected fiscal fourth-quarter results.

How good were the numbers? Well, it helps if you come in with relaxed expectations. Earnings clocked in at $0.28 a share, nearly flat with last year's $0.27-per-share showing. Revenue fell by 7% as a result of eatery closures over the past year and declining comps.

None of that is very exciting stuff, until you consider that analysts were targeting a profit of just $0.19 a share on an 11% top-line slide.

Dig deeper and you'll find that fourth-quarter sales at the individual unit level fell by just 3.2% at company-owned restaurants. That's an improvement over the sharper declines in comps through the first three quarters of the chain's fiscal year. Domestic franchised locations fell harder, at a 6.9% clip, but 672 of the 901 Ruby Tuesday locations out there are company-owned -- and franchise revenue accounts for less than 1% of total revenue.

Folks haven't stopped going to Ruby Tuesday. They're just spending less. Guest traffic actually rose during the quarter.

In fact, Ruby Tuesday has been doing plenty of things right. It was able to pay down $32 million of its debt during the quarter. It also has a realistic outlook. It doesn't plan to open any new restaurants in fiscal 2010, although a few franchised outlets will begin operation, mostly overseas. In fact, it plans to eliminate 14 locations once their leases run out this year.

Despite the improving trend on comps, Ruby Tuesday expects same-unit sales to fall between 2.5% and 3.5% in the new fiscal year, which began last month. That seems like a conservative estimate, so we can come to the same conclusion about the company's bottom-line guidance that calls for fiscal 2010 earnings of $0.50 to $0.65 a share.

Investors are clearly warming up to casual dining again. Ruby Tuesday's shares have more than quadrupled this year. Rival chains can't match that kind of price action, but they're no slackers, either.


2009 Gain

Ruby Tuesday


DineEquity (NYSE:DIN)


Famous Dave's (NASDAQ:DAVE)


Brinker International (NYSE:EAT)


Cheesecake Factory (NASDAQ:CAKE)


BJ's Restaurants (NASDAQ:BJRI)


Cracker Barrel (NASDAQ:CBRL)


The fundamentals aren't necessarily improving at these chains, as most are still struggling with sluggish comps and stingy patrons. However, the stocks were beaten down so badly in 2008 that just a whiff of stabilization has been enough to ring the dinner bell for investors.

Ruby Tuesday is leading the way, even if that lead simply means that it's retreating less on the operating front than it used to.

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Longtime Fool contributor Rick Munarriz is the rare foodie who embraces restaurant chains. He owns shares of Cheesecake Factory and Cracker Barrel, and he's part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.