WINTER PARK, Fla. – Ruth’s Hospitality Group Inc., parent company of the Ruth’s Chris Steakhouse chain of restaurants, reported higher same-store sales, revenues and net income for the second quarter.

For the second quarter ended July 1, 2018, comparable restaurant sales at company owned units climbed 1.3 percent on average check increase of 1.4 percent which was partially offset by a 0.1 percent decrease in traffic as measured by entrees, the company reported. Additionally, the calendar shift of Easter from the second quarter of 2017 into the first quarter of 2018 negatively impacted comparable restaurant traffic sales by approximately 70 basis points in the second quarter.

Total revenues for the second quarter of fiscal 2018 were $109,635,000, up from $100,015,000 reported in the year-ago period. Net income increased to $9,573,000, or $0.32 per diluted share, compared to $7,811,000, or $0.25 per diluted share, in the second quarter of 2017.

The company also reported $400,000 in deal-related expenses associated with the acquisition of six restaurants from a Hawaiian franchisee.

“I am pleased with our second quarter results, which reflect the strength and consistency of our business,” said Michael P. O’Donnell, chairman and CEO of Ruth’s Hospitality Group. “Financial results included revenue growth of 9.6 percent, comparable restaurant sales growth of 1.3 percent, and restaurant level margin expansion. Our Hawaiian restaurants are steadily achieving sales and profits ahead of our expectations, and we are in the final stages of a successful integration.”

Franchise income in the second quarter of 2018 totaled $4.5 million, up 4.7 percent from $4.3 million reported in the second quarter of 2017. The company attributed the result to a 1.3 percent increase in comparable franchise restaurant sales as well as the impact of a new revenue recognition standard, partially offset by the acquisition of the Hawaii restaurant locations.

At the end of the second quarter, 77 company owned Ruth’s Chris Steak House restaurants were open compared with 70 locations open at the end of the year-ago period. A total of 75 franchisee-owned restaurants were open at the end of the second quarter compared with 81 at the end of the second quarter of 2017.

On the operations side, food and beverage costs, as a percentage of restaurant sales, dropped 180 basis points to 28.1 percent driven by a 10 percent decrease in total beef costs, as well as by an increase in average check of 1.4 percent, the company said.

Restaurant operating expenses climbed 50 basis points to 48.3 percent on an increase in occupancy related expenses.

Additional costs related to the integration of the Hawaiian restaurants drove general and administrative expenses higher by 40 basis points to 8.5 percent. Marketing and advertising costs jumped 80 basis points. The company said a planned increase in advertising spending along with the reclassification of certain administrative support costs that have been historically charged to general and administrative costs, drove cost increases.

The Tax Cuts and Jobs Act decreased the company’s income tax expenses to $1.8 million from $3.6 million reported in the second quarter of 2017.

Total operating weeks for the second quarter increased to 1,001 from 910 a year ago.

The company expects to open a new restaurant in Jersey City, New Jersey, in the third quarter and another in Paramus, New Jersey, in the fourth quarter. A restaurant operating under a management agreement in Reno, Nevada, is expected to open early in the first quarter of 2019.

Franchise partners opened one new restaurant in Fort Wayne, Indiana, and expect to open another new restaurant in Markham, Ontario, in the fourth quarter.