The chain, which is one of the largest fine-dining steakhouses in the world with 92 restaurants, plans to open 12 to 14 new stores this year. The growth represents an increase of roughly 15%. Ruth's Chris will focus on suburban locations in dense major metro areas, said president and CEO Craig Miller during the presentation.
Part of the company's growth in 2006 will be driven by franchise expansion, Miller said. Ruth's Chris is the only high-end steakhouse that has a franchise model. Today, franchisees operate 51 stores in the Ruth's Chris chain, and the company is looking for additional franchisee partners.
The average size of a Ruth's Chris store has been expanded from 8,500 sf to 9,000 sf to allow for a larger bar area and banquet rooms, Miller said. "A very important part of the business is adult beverages," he said, adding that 25% of the company's revenues are derived from wine and specialty liquor. In an effort to drive additional beverage sales, the chain has implemented a sommelier training program for every store.
The chain will continue to market to its core customer base, which includes business travelers, families and high-end consumers. Unlike most of Ruth's Chris competitors that focus on the business traveler, more than 2/3 of Ruth's Chris customers are non-business travelers, according to Miller.
A diverse customer base allows the chain to perform well during periods of low business travel. In 2005, for example, the company's same-store sales were up 10.4%, according to Thomas Pennison, senior vice president of finance and CFO. "We are in our 32 consecutive quarter of positive comp sales," he noted during the conference.
The chain's average unit volume increased 11% during 2005 to $5.2 million, and during the most recent quarter, the company achieved system-wide sales of $206.6 million. Ruth's Chris is projecting 3% earnings growth for 2006.
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