What: Shares of casual dining chain Ruby Tuesday (NYSE:RT) took a spill last month, sliding 16% according to data from S&P Capital IQ. As you can see from the chart below, the stock took a hit following a weak first quarter earnings report. 

RT Chart

RT data by YCharts

So what: Ruby Tuesday revenue slipped in the quarter, falling 0.6% to $279.5 million due to a net reduction of 11 restaurants. Same-store sales, meanwhile, ticked up 0.6%, though traffic fell 2.9%. On the bottom line, the company posted a per-share loss of $0.03, down from a penny-per-share profit a year ago and well below estimates of a $0.05 profit.

Despite the poor quarter, management sees a profit for the full year of $0.12 to $0.17 per share. It expects to close a net of 11 to 14 company-owned restaurants and for same-store sales to be flat to up 2%. CEO JJ Duetgen also said he expected profitability to improve in the second half of the fiscal year as investments in inventory management systems and other technologies started to pay off. 

Now what: Despite Duetgen's optimism, Ruby Tuesday is still searching for traction in its turnaround. Shares were trading at five-year lows at the end of the month, and projections of $0.12 to $0.17 in full-year earnings mean the stock is still expensive on a price-to-earnings basis.

Increasing its focus on its namesake chain, Ruby Tuesday announced last week that it would sell off eight company-owned locations of its Lime Fresh Mexican Grill chain to Rubio's Restaurants for $6.3 million and close the remaining 11. Eight franchised locations will stay open with Ruby Tuesday remaining the franchisor. 

The sale provides a coda to a misguided foray into the fast casual sector as it acquired Lime Fresh Mexican Grill in 2012, which at the time included seven company-owned restaurants and five franchised ones, for $24 million. Separating itself from Lime Fresh may be the best decision at this point, but it underscores the ineffectiveness of the company's strategy. With sales at Ruby Tuesday's locations still falling and little sign of meaningful growth ahead, a turnaround seems unlikely to happen anytime soon.

Jeremy Bowman 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.