Ruby Tuesday to close 70 stores, quarterly losses up

No word on Lenoir City Location

News Sentinel staff

Ruby Tuesday said today it would close 40 restaurants in the current quarter and close another 30 restaurants over the next few years in a continuing effort to deal with declining sales.

The Maryville, Tenn.-based company reported Wednesday net loss of $37.4 million, or a diluted loss of 73 cents per share, for in the second fiscal quarter ended Dec. 2, 2008.

Ruby Tuesday’s financial report was released after the markets closed.

The net loss included pre-tax charges of $56.2 million, or 71 cents per diluted share, for restructuring its portfolio and a goodwill write-off, the company said.

For the same period a year ago, the company lost $10.4 million, or 20 cents per share.

Revenue for the second quarter fell to $289.8 million from $320.9 million for the same period a year ago, with the decrease reflecting a 10.8% decline in same-restaurant sales.

In response to declining sales and rising losses, “management took decisive action during the quarter to lower the company’s costs and improve the productivity,” according to a press release.

Highlights of these actions include reducing costs by $40-45 million annually, including lowering general and administrative and other expenses, and the benefit from our restructuring, the company said.

Sandy Beall, founder and CEO said in a statement: “We are highly focused on four key aspects of our business: improving same-restaurant sales; maintaining and growing cash flow; improving the productivity and quality of our restaurant locations; and strengthening our balance sheet and reducing debt by an estimated $80-90 million in fiscal 2009. We paid down approximately $40 million of debt in the first half of the fiscal year.”