Ruby Tuesday rebounding

by Monica Watrous
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MARYVILLE, Tenn. — Menu innovation and a more effective marketing strategy led to higher sales and traffic at Ruby Tuesday Inc. during the company’s first quarter. Same-restaurant sales rose 1.1 percent at company-owned locations, driven by a 1.3 percent increase in guest count.

For the quarter ended Sept. 2, net income advanced to $2,565,000, equal to 4 cents per share on the common stock, which compared with a loss of $22,242,000 in the prior-year period. Revenues dropped 2.9 percent to $281,182,000 from $289,674,000, reflecting the closing of 38 underperforming restaurants.

In the coming year, Ruby Tuesday is focused on three goals: improving business capabilities, simplifying operations, and strengthening employee culture.

“As part of our brand transformation efforts, our operations team is focused on driving profitable same-restaurant sales growth with a balanced approach to the business,” said Todd Burrowes, president, Ruby Tuesday concept, and COO, during an Oct. 8 call with financial analysts to discuss earnings.

Ruby Tuesday has implemented a new labor productivity tool to reduce costs and improve customer experience. The company also is developing a comprehensive inventory management system, which it plans to test during the fourth quarter and roll out system-wide next fiscal year.

“This new system will work in conjunction with the guest count forecaster that we previously implemented to ensure that food ordering and production is timely and accurate, strengthen our food quality, while reducing our food costs,” Burrowes said. “Another advantage of the system is it will allow our managers to spend less time on activities such as product ordering and inventory management so they can spend more time interacting with our team members and our guests.”

Efforts to simplify operations include a new employee training program and production enhancements in the kitchen.

“As you may know, in the last 18 months we’ve introduced 40 new and improved items to our menu,” Burrowes said. “Our goal here is to make a quantum leap in the execution level of our existing menu items while freeing up capacity for additional menu innovation to support our brand transformation strategy.”

Finally, Ruby Tuesday is focused on improving its work culture and sustaining high levels of retention.

“We will accelerate our efforts to recognize and reward great performance while ensuring that we create meaningful development plans so that every salaried leader in the organization is clear on their leadership strengths and fully understands what areas they can improve to get them ready for increased responsibility,” Burrowes said.
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