Ruby Tuesday announced Thursday that it will close approximately 95 underperforming restaurants by September 2016. As of May 31, 2016, Ruby Tuesday’s system included 724 restaurants, of which 646 were company-operated.
“The decision to close restaurants is a difficult but necessary step as we take aggressive actions to strengthen our organization,” said JJ Buettgen, Chairman of the Board, President, and Chief Executive Officer. “Performance at each of these locations, despite the loyalty of valued guests and the efforts of our dedicated employees, was not meeting expectations. Full-time and part-time employees impacted by closures will be offered positions in nearby restaurants where possible.”
In Thursday’s financial results, the company reported that same-restaurant sales had declined 3.7% following a 1.7% decline in the fourth quarter of the prior fiscal year.
Total revenue declined 5.9% to $279.3 million. Net Loss was $27.6 million, or ($0.46) per diluted share, compared to Net Income of $4.3 million, or $0.07 per diluted share in last fiscal year’s fourth quarter.
Buettgen commented, “Our fourth quarter was impacted by softness in the casual dining industry and increased promotional activity by our peers. Given that we expect the macro environment to remain challenging for some time, we are taking the necessary steps to change the trajectory of our business.”
The chain also announced plans to streamline the organization, improve financial profitability, and create long-term value for shareholders through its Fresh Start initiative.
“Our Fresh Start Initiative has been designed to streamline our organization through asset rationalization, improve financial profitability, and ultimately create long-term value for shareholders,” Buettgen said. “Our Fresh New Menu, Fresh New Garden Bar, and Fresh Experience initiatives will position us to accelerate traffic and will be supported by better in-restaurant execution, refining our media and targeting plans, and incorporating the insights from our Garden Bar and remodel tests into our go forward strategy. Through our goal of attracting more women and young families as well as increasing visits from our current Ruby Tuesday guests, we believe we can return to positive same-restaurant sales, expand restaurant level margins, and increase operating profit.”