NEW YORK ( TheStreet) -- Shares of Ruby Tuesday (RT - Get Report) fell sharply in extended trades on Wednesday after the Maryville, Tenn.-based casual restaurant operator missed Wall Street's profit expectations for its fiscal third quarter.
Ruby Tuesday blamed tough winter weather for the shortfall, saying it was hit harder than most other chains because the majority of its locations are in the Eastern region of the United States.
The company reported earnings of $16 million, or 25 cents a share, for the three months ended March 1 on revenue of $319.1 million with same-restaurant sales down 1.2%. That performance was down from last year's net income of $17.8 million, or 28 cents a share.
Excluding items, Ruby Tuesday posted a profit of 24 cents a share, 7 cents below the average estimate of analysts polled by Thomson Reuters for earnings of 31 cents a share. The company estimated the bad weather lowered earnings by 3 to 4 cents a share while negatively impacted same-restaurant sales by 1.5%-2%."While our earnings per share trailed the prior-year results, excluding the winter weather impact which hit us harder than most of our peers since approximately 90% of our Company-owned restaurants are concentrated in the Eastern U.S., we would have been in line with our prior-year results, even after absorbing the investments we have made this year," said Sandy Beall, the company's founder, chairman, and CEO, in a statement. Beall continued: "These investments, which include our fresh bread program served complimentary with every entree, incremental labor for service enhancements, and new marketing brand research initiatives, should all yield attractive returns." The company also gave a full-year outlook that's markedly below the current consensus view, saying it sees earnings of 74 to 82 cents a share vs. the average analysts' profit estimate of 90 cents a share. The stock was last quoted at $12.02, down 10.1%, on volume of nearly 400,000, according to Nasdaq.com. Based on a regular session close at $13.37, the shares have gained 16% in the past year but they've pulled back since reaching a 52-week high of $15.57 on Jan. 6.