Ruby Tuesday Surges on Earnings Beat

MARYVILLE, Tenn. ( TheStreet) -- Ruby Tuesday ( RT) shares surged Thursday morning after the casual dining chain posted better-than-expected quarterly earnings and topped estimates by more than 40%

The Maryville, Tenn.-based casual restaurant operator said late Wednesday it earned $4.6 million, or 7 cents per share, in the three months ended Nov. 30, up from a year-earlier profit of $400,000, or a penny per share, and well ahead of analysts' consensus call for earnings of a 5 cents per share.

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Total revenue rose 6.2% to $290.5 million in the November period, up from $273.5 million in the second quarter last year.

Ruby Tuesday said comparable same-store 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. The same-store sales figure refers to sales at stores open at least one year and is a closely watched metric in the restaurant industry.

Ruby Tuesday shares surged 9.6% to $15.35 in the first minutes of trading Thursday. The stock closed Wednesday at $14.01, up 9 cents, on volume of around 785,000 compared with average daily trading volume of 468,000. Ruby Tuesday's stock is coming off a stellar 2010 when it appreciated more than 80%.

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

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Elsewhere in the restaurant sector, Sonic ( SONC) posted better-than-expected earnings late Tuesday, despite slower sales.

The drive-in fast-food chain booked quarterly earnings of $7.2 million, or 12 cents per share, up from $6.2 million, or 10 cents per share, in the year-earlier period. That beat analysts' consensus call for profits of $5.8 million, or 10 cents per share.

Excluding a one-time 2-cent per share tax benefits, EPS would have been flat year-over-year at 10 cents, matching expectations. Analysts typically exclude such extraordinary items when setting expectations.

Sonic said revenue fell 5.4% to $129.1 million, from $136.5 million in the first quarter last year. Analysts had been looking for sales of $128.7 million.

Comps declined 2.4% year-over-year, improving from a decline of 6.4% in the first quarter last year. Same-store sales at franchise drive-ins declined 2.5% while same-store sales at company-owned drive-ins declined 1.9%.

Looking ahead, Sonic said it expects to open between 40 and 50 new franchise drive-ins this year with sequentially improving same-store sales throughout the fiscal year.

Still, Sonic's fiscal second quarter, currently underway, is typically its slowest and most volatile because poor weather conditions inhibit customers from dining at its drive-in locations.

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Analysts expect Sonic's current quarter earnings to come in at 4 cents per share on revenue of $115.2 million.

Sonic shares were 0.4% lower at $11.27 Thursday morning.

-- Written by Miriam Marcus Reimer in New York.

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