Ruby Tuesday, Inc. (RT)

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Ruby Tuesday (RT)

Q2 2013 Earnings Call

January 09, 2013 5:00 pm ET

Executives

Greg Ashley - Vice President of Finance

James J. Buettgen - Chief Executive Officer and President

Michael O. Moore - Chief Financial Officer, Principal Accounting Officer and Executive Vice President

Daniel P. Dillon - Chief Branding Officer and Executive Vice President

Kimberly S. Grant - Chief Operations Officer and President of Ruby Tuesday Concept

Analysts

Joseph T. Buckley - BofA Merrill Lynch, Research Division

Robert M. Derrington - Northcoast Research

Keith Siegner - Crédit Suisse AG, Research Division

Peter Saleh - Telsey Advisory Group LLC

Bryan C. Hunt - Wells Fargo Securities, LLC, Research Division

Rosemary Sisson

Presentation

Operator

Greetings, and welcome to the Ruby Tuesday, Inc. Second Quarter Fiscal Year 2013 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Greg Ashley, Vice President of Finance for Ruby Tuesday. Thank you, Mr. Ashley. You may begin.

Greg Ashley

Thank you, Robin. And thanks to all of you for joining us this evening. With me today are J.J. Buettgen, President and Chief Executive Officer, Ruby Tuesday; Michael Moore, Executive Vice President and Chief Financial Officer; Dan Dillon, Executive Vice President, Brand Development; and Kimberly Grant, President, Ruby Tuesday Concept and Chief Operations Officer.

I would like to remind you that there are likely to be forward-looking statements in our comments, and I refer you to the note regarding forward-looking information in our press release and our most recently filed Form 10-Q.

We plan to release our third quarter fiscal year 2013 earnings in early April. Our second quarter earnings were released earlier today after the market closed, and a copy of our press release can be found on the Investor Relations section of our website at rubytuesday.com and is also available on Business Wire, FirstCall and other financial media outlets.

Our format today includes an overview of our second quarter financial results, an outlook for the remainder of fiscal 2013 and a review of our plans and strategies. At the conclusion of our prepared remarks, we will respond to your questions.

As most of you know, J.J. Buettgen joined Ruby Tuesday as our President and CEO in early December and has been on the job now for almost 45 days. We look forward to the investment community spending time with J.J. in person over the next several quarters as we are out on the road.

I will now turn the call over to J.J.

James J. Buettgen

Thank you, Greg. I would like to welcome all of you listening in this evening on our second quarter earnings call. Before we get into the details of our second quarter results, I would like to take a few moments to speak to the transition of leadership at Ruby Tuesday. I'm honored to be leading the Ruby Tuesday teams and excited about the opportunity to grow and strengthen the company. This earnings call represents the first time in the 40-year history of the organization that somebody other than Sandy Beall has led the team or represented the organization to the investment community. On behalf of the Ruby Tuesday Board of Directors, the over 30,000 employees who currently work for Ruby Tuesday, as well as the tens if not hundreds of thousands of employees who have worked for the organization throughout its history, I'd like to personally take this opportunity to congratulate Sandy on a spectacular career as an entrepreneur, restaurateur, visionary leader and CEO. Starting with the spark of an idea, a group of partners, investors and friends, Sandy built Ruby Tuesday from 1 restaurant into an iconic American brand and one of the largest full-service dining companies in the world with nearly 800 restaurants. Sandy created tremendous opportunity for investors and, most importantly, for the legions of employees, myself included, who have been able to build and develop careers as part of the Ruby Tuesday team. He is one of the few true pioneers who helped build and grow the casual dining industry. Sandy, we would like to thank and congratulate you on a phenomenal career at Ruby Tuesday and wish you great success in all of your future endeavors.

As Greg noted earlier, I've been here for a little over a month now, and these first few weeks have been valuable, constructive and informative and a time for learning the rich history that makes Ruby Tuesday unique. While we do have some near-term challenges, we also have a tremendous amount of opportunity in front of us, and I believe we can create significant value for our shareholders for years to come.

I'm going to present a brief overview of our quarter and provide some insights into our decision to exit several of our non-core brands. Michael and Greg will provide a financial review and guidance outlook. Dan will provide an update on our marketing programs, and Kimberly will present an overview of our key operating plans. I will then wrap up the call with some closing comments before we take your questions.

We are pleased to report positive same-restaurant sales of 0.3%, our second consecutive quarter of positive sales. The casual dining environment remains intensely competitive, driven by the uncertain and volatile consumer spending environment, in addition to recent increases in overall advertising and promotional activity in our competitive set. These pressures are likely to continue at least for the near term, which makes the optimal allocation of marketing dollars, primarily in the areas of television, advertising and promotions, more critical than ever before. Based on the competitive intensity trends we've seen over the last several months, we are projecting approximately flat same-restaurant sales for the year.

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