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Ruby Tuesday Cooks Up Strong Quarter

NEW YORK ( TheStreet) -- Ruby Tuesday (RT - Get Report) topped Wall Street expectations for its fiscal second-quarter earnings by more than 40% on Wednesday with the outperformance driven by higher sales and improving operating margins.

The Maryville, Tenn.-based casual restaurant operator said it earned $4.6 million, or 7 cents a share, in the three months ended Nov. 30, up from a year-ago equivalent profit of $400,000, or a penny per share, and well ahead of the average estimate of analysts polled by Thomson Reuters for earnings of a nickel per share.

Total revenue rose 6.2% to $290.5 million in the November period from $273.5 million in the year-ago equivalent period. Ruby Tuesday said same-restaurant sales rose 4.2% year-over-year, and that its operating margin swelled to 15.1% in the latest quarter from 13.7% last year.

For its fiscal year ending in May, Ruby Tuesday forecast same-restaurant sales coming in between flat and up 2% with earnings per share expected to range from 76 to 86 cents a share. Wall Street's current consensus estimate is for full-year earnings of 86 cents a share.

Shares of Ruby Tuesday closed Wednesday's regular session at $14.01, up 9 cents, on volume of around 785,000, ahead of the issue's trailing three-month daily average of 530,000. The stock is coming off a stellar 2010 when it appreciated more than 80%, and it was already looking higher in after-hours action, last quoted at $14.40, up 2.8%, on volume of 135,000, according to

Going into the report, five of the eight analysts covering Ruby Tuesday were at either strong buy (2) or buy (3), but the stock was bumping against Wall Street's median 12-month price target of $14.63.

-- Written by Michael Baron in New York.

>To contact the writer of this article, click here: Michael Baron.

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Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

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