Ruby Tuesday, Inc. (RT) saw its loss widen to $37.96 million, or $0.63 a share for the quarter ended Nov. 29, 2016. In the previous year period, the company reported a loss of $15.80 million, or $0.26 a share. On the other hand, adjusted net loss for the quarter widened to $10.86 million, or $0.18 a share from a loss of $2.36 million or $0.04 a share, a year ago.
Revenue during the quarter dropped 17.72 percent to $214.72 million from $260.96 million in the previous year period. Gross margin for the quarter contracted 200 basis points over the previous year period to 71.06 percent. Operating margin for the quarter stood at negative 15.40 percent as compared to a negative 4.17 percent for the previous year period.
Operating loss for the quarter was $33.08 million, compared with an operating loss of $10.87 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at negative $2.67 million compared with $14.13 million in the prior year period. At the same time, adjusted EBITDA margin stood at negative 1.24 percent for the quarter compared to 5.42 percent in the last year period.
Lane Cardwell, Interim president and chief executive officer, commented, "While the results of our fiscal second quarter were disappointing, I am excited about the strategic changes and the new product rollouts that began with the introduction of our Fresh New Menu in November and will continue in January with the national launch of our Fresh New Garden Bar." Cardwell continued, "Our progress in executing the key strategies of the Fresh Start initiative should be viewed in two stages. The first is marked by the launch of our Fresh New Menu in mid-November while the second is marked by the launch of the enhanced Garden Bar in mid-January. We believe this combination will ultimately have a positive impact on our performance through increasing guest count and frequency."
Working capital turns negative
Working capital of Ruby Tuesday, Inc. has turned negative to $11.05 million on Nov. 29, 2016 from positive $10.21 million on Dec. 01, 2015. Current ratio was at 0.91 as on Nov. 29, 2016, down from 1.11 on Dec. 01, 2015.
Days sales outstanding were almost stable at 3 days for the quarter, when compared with the last year period.
Days inventory outstanding has decreased to 16 days for the quarter compared with 31 days for the previous year period.
Debt comes down marginally
Ruby Tuesday, Inc. has recorded a decline in total debt over the last one year. It stood at $223.24 million as on Nov. 29, 2016, down 3.74 percent or $8.68 million from $231.92 million on Dec. 01, 2015. Total debt was 29.02 percent of total assets as on Nov. 29, 2016, compared with 26.23 percent on Dec. 01, 2015. Debt to equity ratio was at 0.67 as on Nov. 29, 2016, up from 0.52 as on Dec. 01, 2015.
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