In the wake of its preliminary third quarter fiscal results, Ruby Tuesday says it is ready to explore “strategic alternatives” as it looks to reverse an alarming downturn that included the closing of 95 restaurants in the first quarter of 2017.
This is not limited to a potential sale or merger of the company, which operates 613 restaurants in 42 states, 14 foreign countries, and Guam, the announcement said. Of those, 546 are company owned and 67 are franchised locations.
“Ruby Tuesday is an iconic American brand with a 45 year legacy of serving local communities great American fare. While we continue to focus on executing against our Fresh Start initiatives including the rollout of our Fresh New Menu, Fresh New Garden Bar and Fresh Experience, we believe now is the right time to explore strategic alternatives that have the potential to position the business for long-term success and to carry that legacy forward,” said Stephen Sadove, non-executive chairman of Ruby Tuesday, in a statement. "We are confident the process will identify the best strategic avenues to maximize the value of our business and achieve the best result for our shareholders, franchisees, and team members."
Ruby Tuesday’s preliminary reports showed a same restaurant sales decline of around 4 percent at units open at least a year. Total revenue, including franchise revenue, fell around 17 percent compared to a year earlier to 225.7 million.
Financials in October showed a revenue drop of 8.2 percent and the closure of 109 company-owned restaurants since the first quarter of the previous year.
The decision to consider a sale was met with optimism from investors. The company’s stock skyrocketed 17.8 percent to $2.05. Shares have plummeted around 67 percent in the last 12 months.
In January, Ruby Tuesday unveiled its upgraded salad bar nationwide. The expanded offering included more than 55 ingredients—nearly double the items on the former salad bar. The additions included ingredients such as shredded kale, chopped romaine, artichoke hearts, roasted corn and edamame are just a few of the new items alongside such lasting favorites as diced cucumbers and onions, sliced baby ‘bella mushrooms, diced eggs, crumbled feta, and chopped bacon. Eight new dressings made in-house were added as well. This followed the November 2016 roll out of a new core menu featuring bolder, higher-quality choices, such as BBQ Chicken Salad and Kale Caesar Salad.