Ruth’s Chris is getting back on its feet. The high-end steakhouse chain said Thursday in a securities filing it expects to have 35 company-run dining rooms and 48 franchises open by the end of the week. There will also be 29 corporate stores running via takeout and delivery only (seven franchises as well) and 39 total temporarily closed. Another nine dining rooms are expected to come on line by mid-June.
It’s been a difficult period for Ruth’s Chris—an experience-driven brand that relies heavily on dine-in traffic. During its four-week fiscal period that ended May 31, the company averaged weekly sales of $30,600 at corporate units operating with open dining rooms or takeout and delivery. The average in May 2019 was $106,400.
Ruth’s Chris said it hasn’t experienced any significant disruption to its beef supply. However, it did witness beef inflation in May and expects continued pressure in June.
As of June 1, Ruth’s Chris had a cash balance of $102.8 million, a debt balance under its senior credit facility of $138.5 million, and outstanding letters of credit of $4.6 million.
The company said during its Q1 review in May that same-store sales dropped 50.5 percent in March. In April, average weekly sales were $19,200 as comps dropped 83.5 percent.
Ruth’s Chris pulled that off-premises number up to current levels by simplifying its menu, expanding third-party delivery networks, and launching online ordering and payment. Delivery sales were from mixing in the low single-digit range of prior-year sales to more than 16 percent in April.
On the dine-in side, Ruth’s Chris introduced QR codes for guests to access its menu on mobile devices. And it started selling new side options along with shareables, and offering opportunities for small private groups to experience menus like the TasteMaker Wine Dinners until the program could be launched systemwide again. Ruth’s Chris said it would limit the number of employees providing service to each table as well.
CFO Arnie Haak also noted the chain was in constant contact with landlords about abatements and lease modifications, and expected to reach compromises. However, there was a possibility that up to 10 company-owned stores could close if the brand wasn’t able to “recalibrate our operating and occupancy costs.”
Previously, Ruth’s Chris furloughed a “significant number of field and home office” employees and reduced the salaries of non-furloughed employees, including CEO Cheryl Henry and other members of the executive team. Non-employee board members also chose to suspend payment of their compensation.
Ruth’s Chris faced some heat in April for getting approval for $20 million in Paycheck Protection Program loans. The chain decided to give the money back.
