Ruby Tuesday (RT)
Q2 2012 Earnings Call
January 05, 2012 5:00 pm ET
Marguerite N. Duffy - Chief Financial Officer, Senior Vice President and Principal Accounting Officer
Kimberly M. Grant - Chief Operations Officer and Executive Vice President
Daniel P. Dillon - Senior Vice President of Brand Development
Samuel E. Beall - Co-Founder, Executive Chairman, Chief Executive Officer and President
Greg Ashley - Vice President of Finance
Peter Saleh - Telsey Advisory Group LLC
Keith Siegner - Crédit Suisse AG, Research Division
Howard W. Penney - Hedgeye Risk Management LLC
John Dravenstott - KeyBanc Capital Markets Inc., Research Division
Robert M. Derrington - Morgan Keegan & Company, Inc., Research Division
Joseph T. Buckley - BofA Merrill Lynch, Research Division
Bryan C. Elliott - Raymond James & Associates, Inc., Research Division
Christopher T. O'Cull - SunTrust Robinson Humphrey, Inc., Research Division
Previous Statements by RT
» Ruby Tuesday's CEO Discusses Q1 2012 Results - Earnings Call Transcript
» Ruby Tuesday's CEO Discusses Q4 2011 Results - Earnings Call Transcript
» Ruby Tuesday's CEO Discusses Q3 2011 Results - Earnings Call Transcript
Thank you, Robin, and thanks to all of you for joining us this evening. With me today are Sandy Beall, Ruby Tuesday Chairman and CEO; Margie Duffy, Chief Financial Officer; Dan Dillon, Senior Vice President, Brand Development; and Kimberly Grant, Executive Vice President.
I would like to remind you that there are likely to be forward-looking statements in our comments, and I refer you to the notes regarding forward-looking information in our press release and most recently filed Form 10-Q. We plan to release third quarter fiscal '12 earnings in early April.
Our second quarter earnings were released today after the market closed. 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.
As usual, our format today includes the following: an overview of our second quarter financial results, our fiscal 2012 outlook and a review of our plans and strategies. At the conclusion of our prepared remarks, we will respond to your questions.
I will now turn the call over to Sandy.
Samuel E. Beall
Thanks a lot, Greg. First of all, I really would like to welcome all of you all listening in this evening, and thank you for joining us. I know it's late in the day. I hope we'll give you some good information on our conference call. I'll begin with a brief overview of our quarter and an update of our key value creation initiatives. Margie and Greg will then provide a financial overview and guidance update, and then Dan and Kimberly will provide additional detail on our marketing and operation plans.
As you may have seen in our earlier press release, we reported diluted loss of $0.03 per share for the quarter. These results were slightly ahead of our guidance range of down $0.04 to down $0.08. Our continued focus on cost savings enabled us to mitigate. We do control cost well to mitigate the operating loss in the second quarter. As you know, second quarter has generally been -- has always been, our lowest revenue quarter relative to the rest of the year.
Our same-restaurant sales results for the quarter at down 4.2% were below expectations. If there's any positive to it, they were flat on a 2-year basis, so that's an improving trend versus the first quarter. We went up against very, very strong sales of 4.2% last year, which probably our best quarter I think ever in the history of the company last year.
During the quarter, we had several positive accomplishments, which I'll summarize then we'll have a little more detail on these later in the call. First of all, we continue to make progress on several media tests promoting our value-oriented test offerings such as our free Garden Bar with over 40 entrées. We opened 3 Marlin & Ray conversion restaurants, 1 of which was opened subsequent to the quarter end. We opened our first Lime Fresh in-line restaurant, and we completed our first sale leaseback transaction subsequent to the quarter end, so some positive momentum there.
As we look out over the next several quarters and years, we continue to remain focused on really 5 key initiatives, which we believe can create good value for us and our shareholders. First of all, we continue to strengthen our upgraded and focused brand position and are leveraging our Garden Bar free with every entrée, which is a unique differentiator for us among our peer groups as part of our history, strong part of Ruby Tuesday. We think it plays well with the consumer.
As we and other industry peers have noted, the promotional environment continues to be very aggressive with heavy advertising levels within the casual dining and bar grill segment. The promotional programs we've historically utilized, coupons, don't compete as well versus the high-value heavy TV advertisements in this type of environment. So we're changing. We're testing some, and so far it's looking pretty good.
We're testing various value-oriented offerings such as our free Garden Bar promotion in several of our markets, many of which supported by TV. We're also reducing our coupon expense going forward to help fund these efforts. We believe our fresh Garden Bar is a huge point of depreciation as I said a second ago. It can't be duplicated really or not very easily, and the value that we bring to the consumer through this offering, free Garden Bar, along with our free fresh-baked bread, et cetera, is pretty powerful and we plan on increasing our TV locations from approximately 20% today to 50% of the system in the fourth quarter. So we're excited about that.