Ruby Tuesday's growth strategy calls for a shift in emphasis to remodelings, although the company still plans to add new units. Beall commented, "Our priority is on achieving positive same-restaurant sales. It's where we have the most potential of increasing return on invested capital for our shareholders. Based on that, we are investing more capital in existing assets by accelerating our remodelings during the fiscal year."
With 933 Ruby Tuesday restaurants in 45 states and overseas, including both company-owned and franchised operations, Ruby Tuesday's goal is to complete remodels of substantially all company-owned restaurants. Along with that goal it is being more selective on new locations.
The company's plans call for the opening of 20 to 25 company-owned restaurants in the coming year and 25 to 35 franchise locations. Commented Beall, "We do not intend to let the current sales environment detract from our focus on doing what is right long-term for our guests and shareholders. We will continue to build a fresh new brand."
Beall cited a new summer menu and other initiatives designed to build customer loyalty at the chain, which opened a net of seven new restaurants during the quarter. The seven new restaurants included two company-owned locations and five by domestic and international franchisees.
For the full year, the company opened 45 new Ruby Tuesdays and acquired 28 from Florida franchisees. It closed 15 restaurants and sold or leased seven to existing franchisees. Domestic and international franchisees opened a net of 23 new locations.
Ruby Tuesday's fourth-quarter results showed earnings per share of 46 cents on net income of $24.7 million, compared with 53 cents per share and net income of $31.7 million in the fourth quarter of last year. The company said that this year's earnings would have been closer to last year's without the impact of certain one-time charges, but the net would still have come in slightly below last year's figure.
Fourth-quarter same-store sales decreased 3.9% and 2.1% at company-owned and domestic franchise Ruby Tuesday restaurants, respectively, as compared to positive same-restaurant sales of 2.9% and 7.1% in the fourth quarter of the previous year. The figure for total sales dipped to $357 million, compared with $364 million in the fourth quarter of last year, which was a 14-week quarter compared with this year's 13-week quarter.
For the full year, the restaurant chain reported diluted earnings per share of $1.59 on net income of $91.7 million, compared with $1.65 a share on net income of $100.1 million for fiscal 2006. As with the quarterly results, the full-year earnings dipped because of one-time charges, but would have risen to about $1.75 per share without those charges, the company said. Sales totaled $1.4 billion for the year, compared with $1.3 billion the year before, even though this year was a 52-week period versus the 53-week period the previous year.
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