Goodbye, Ruby Tuesday? Struggling Chain to Close 30 Restaurants
Ruby Tuesday is saying goodbye to 30 restaurants, following a disappointing second-quarter earnings report, executives announced Wednesday.
Ruby Tuesday recorded total revenue of $276.2 million, compared to $300.1 million in the same quarter of the prior year. The company saw a 7.8 percent decline in same-restaurant sales at company-owned restaurants and a 5.3 percent drop at franchise restaurants compared to the same quarter a year ago.
"A critical piece of our brand transformation is lowering our overall cost structure and we will continue to aggressively work toward implementing cost savings in areas that do not negatively impact the guest experience," Ruby Tuesday CEO JJ Buettgen said in a statement. "Our teams' top priorities are to increase guest counts and grow same-restaurant sales."
The chain also announced plans to close 30 restaurants. Most of the closures will take place in the current quarter. Of the 30, eight are owned by Ruby Tuesday and will be put up for sale after they are closed.
The sale of the restaurants is only the most recent incident in Ruby Tuesday's rough patch. Ruby Tuesday's former chairman resigned in October, and the company eliminated about 70 mostly corporate positions in November. In December, the chain reportedly began exploring strategic alternatives, including a possible sale.
Ruby Tuesday isn't the only restaurant franchise working hard to stay afloat. Darden Restaurants recently announced it would shed the struggling Red Lobster chain. Chuck E. Cheese's is also reportedly exploring a potential sale, following declining revenues and same-store sales.
Kate Taylor is a reporter at Business Insider. She was previously a reporter at Entrepreneur. Get in touch with tips and feedback on Twitter at @Kate_H_Taylor.