Henry said that since the beginning of COVID, Ruth’s has worked with one foot in managing pandemic operations and one foot in the future. But with vaccinations increasing, restrictions lifting, and sales rising, the fine-dining chain is now in an offensive position. That means a greater focus on future planning and strategic investments.
As a part of this, Ruth’s will continue to use technology to reduce friction and enhance the guest experience. Off-premises accounted for 12 percent of average weekly sales in Q1, or about $10,000 per week. Henry expects this to land between 5 and 7 percent as dine-in returns, which is still far greater than the 1 to 2 percent mix prior to the pandemic. Throughout COVID, the chain has worked vigorously to mix its high-hospitality, high-touch experience with consumer’s demand for convenience. Henry said the key is just being authentic.
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“So it's not necessarily about the things you might see in putting technology directly into the guest hands as they're in the restaurant,” Henry said. “But more about using data and knowing the guests and making sure they understand that we understand them and their needs. And we believe that's where some of the opportunity is. The other piece is really behind the scenes. It's how we enable the team members to use technology, new programs, new processes to really be efficient and productive at what they're doing.”
“So when we talk about data and digital, it's really kind of this tiered approach from enhanced guest experience, removing friction, as well as making sure we have sustainability in our workforce who wants to work in different ways with new information and to be more effective and productive in doing it,” she continued.
Ruth’s proactive mindset is also fueling development. In May, the chain amended its existing credit agreement, allowing it to increase growth capital expenditures by $15 million to $20 million. The boosted funds will further accelerate unit growth, with two to three new company-run stores expected by the end of the year. Another three to four corporate stores and two franchise units are anticipated for 2022.
“We had growth in the pipeline when COVID hit,” Henry said. “So some of this is seeing those units through. We spent some time looking at the marketplace where these units were and working with the landlords, and we have confidence that these locations are valid moving forward. And what's been indicated, as we mentioned, as markets have reopened, is that the demand for the experience that Ruth's expertly has provided for 55 years is in high demand. And so we have a great level of confidence of bringing this pipeline to fruition.”
Total revenue in Q1 was $87.2 million, compared to $108.5 million in 2020. Net income in Q1 was $9.1 million, or $0.26 per diluted share, compared to net loss of $3.8 million, or –$0.13 per diluted share, last year.