Earlier this year, Ruby Tuesday
For the period, total operating revenue nudged forward by 6.7% compared with the same quarter a year ago, to $289.2 million. Same-store sales declined 8%, as the company placed part of the blame on tough weather conditions.
As bland as its sales numbers were, they taste better than the stale earnings. Net income came in at $27.6 million (or $0.42 per share), a 15% decline from a year ago, while operating margins fell to 14.6% for the quarter, a 23% drop year over year.
The company's forecast for the fourth quarter was no appetizer, either. Ruby Tuesday now expects to earn $0.40 to $0.43 per share, vs. the previous estimate of $0.43 to $0.47. The downward revision reduces anticipated earnings for fiscal 2005 to around $1.50 per share.
At that level, Ruby Tuesday's stock bears a hefty premium while trading at 16.4 times current-year earnings. For value investors, this price will induce sticker shock, especially considering that this is an enterprise with sales up a meager 6.4% and net income down 8.8% (both figures year-to-date). For a concept that lacks distinctness from the likes of Applebee's
Prospective investors looking to take a nibble of this stock should look for a deep discount to offer a margin of protection.
Check out these articles on Ruby Tuesday for further reading:
- Tuesday Has It Tough
- Less of a Shine on Ruby Tuesday
- Restaurant Posts Rave Review
- Good Buy, Ruby Tuesday
Fool contributor Jeremy MacNealy does not own shares in any of the companies mentioned.