Ruby Tuesday (RT) is down ~10% after the company reported third quarter results and named Jim Hyatt its new CEO.
Ruby Tuesday lost $3.8 million or $0.06/share on an adjusted basis versus a $1.6 million loss in the third quarter of 2016. Adjusted EBITDA fell 57% to $8.7 million. Total revenue fell 17% to $225.7 million as the company had ~15% less stores after closing 95 last August. Same store sales fell 4%, in-line with the second quarter's decline. There is no analyst coverage of Ruby Tuesday.
On March 13, Ruby Tuesday preannounced third quarter sales and announced it was reviewing strategic alternatives, including a potential sale or merger of the company.
Less than two weeks later, Leon Capital disclosed a 9.5% stake and showed interest in participating in a strategic transaction.
Last night, the struggling restaurant chain also named James "Jim" F. Hyatt, II as President and Chief Executive Officer and a member of the Board of Directors. Mr. Hyatt previously served as CEO at Cosi and Church's Chicken. Before that, the was an executive at Burger King.
Outgoing (interim) CEO Lane Caldwell said: "The casual dining environment remains highly challenging, promotional, as well as price competitive and our sales trends are reflective of these conditions. Still, we are encouraged by the sequential progress we demonstrated during our third quarter relative to the industry. Specifically, we narrowed our performance gap with respect to same-restaurant sales and average check and have now outperformed in guest counts for three consecutive quarters. More importantly, we are encouraged by recent trends and expect further sequential improvement in operating performance as well as same-restaurant sales in the fourth quarter."
The company continues to make progress on its Fresh Start Initiatives, featuring a new menu, a new garden bar and the sale of closed restaurants/leases.
M&A has picked up in the restaurant sector (Popeye's, Panera) but both of those concepts boasted strong, growing brands.
Ruby Tuesday has a ~$150 million market cap.