Ruby Beats Earnings (Ummm, We Told You So)
Restaurant operator Ruby Tuesday (RI) is officially back from the dead. On Wednesday, the company posted some dynamite numbers.Earnings rose 10% in 3Q, led by higher revs. The company earned $30M vs. $27.5M a year ago. 3Q revenue rose 17% from a year ago to $338.6 million, surpassing Wall Street's forecast of $334.2 million. Same-restaurant sales at company-owned restaurants rose 4.7% in the quarter, while sales at domestic franchise restaurants rose 5.4%.
Ruby bumped up its 4Q outlook, predicting EPS growth in the 25% to 30% range. Looking forward to fiscal 2007, the company expects EPS growth at the lower end of its long-term goal of 12.5% to 15% and it still plans to open about 40 franchises in the year.
As you can see, Ruby didn't really smoke estimates -- it just beat them. When you have a stock that's fighting with a black eye, rarely talked about, and buried under low expectations, an earnings surprise like this is all it takes to put the stock back on Wall Street's radar.
This is something we tried to convey to site visitors/paying subscribers on 2/2, when we published this story and went bullish on Ruby Tuesday when no one else on the Street would.
At the time that report was published, the stock was trading at $28. It's now swapping fingers at $33 and our team is confident higher marketing expenditures will further augment brand awareness and give the stock at least one more oompth.
Didn't someone tell you restaurants are en fuego once again?
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