Ruth's Hospitality Group's CEO Discusses Q2 2011 Results - Earnings Call Transcript

Turning to Ruth's Chris brand, as we noted in our last call, we began testing TV spots this spring as part of our new experience-focused advertising campaign. We plan to expand our efforts in TV as our tests showed promise. We believe that television advertising combined with an improved social media presence will create increased enthusiasm from a broader customer base, although it's important to note that our spending maybe reallocated, we will stay within our annual guidance range.

Our Ruth's seasonal classic prefix remains a cornerstone of our featured promotional activity and continues to comprise roughly 30% of our sales mix. We believe that our diversed guest base appreciates the options of prefix classics, and that this strategy has supported our 6 consecutive quarters of traffic growth. While our results continue to show renewed enthusiasm for high-end dining, we appreciate the economic uncertainty that many consumers continue to face and our prefix strategy -- pricing strategy only reinforces the value that Ruth's Chris offers its guests.

At Mitchell's, we continue to work on our broad positioning and our brand positioning where menu marketing and operational excellence are key. While seafood will remain Mitchell's core offering, we are currently working on expanding our selection of non-seafood items, which we expect will be additive to sales as it helps us appeal to more guests.

At the present time, we have several items in the test market, and we will be evaluating opportunities for further roll out. In addition to broadening customer choice, we believe this can also benefit us with respect to productivity gains in the back of the house where we think we have some opportunity to improve execution at Mitchell's.

We are currently featuring a prefix price fixed at $19.95 and $24.95 as our value proposition and includes a variety of seafood offerings, as well as a 10-ounce rib eye. Given the seasonality of our seafood and our expanding non-seafood offerings, we see the prefix, as well as limited time offers, as a way to have guests always have something new to experience when dining with us.

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