Ruth’s Hospitality Group, Inc. Reports Second Quarter 2016 Financial Results
- Orlando, FL
- Ruth's Hospitality Group
Ruth’s Hospitality Group, Inc. Reports Second Quarter 2016 Financial Results
– Company-owned Comparable Restaurant Sales Increased 1.5% –
– Repurchased 1.2 Million Shares of Common Stock –
WINTER PARK, Fla.--(BUSINESS WIRE)--Jul. 29, 2016-- Ruth’s Hospitality Group, Inc. (NASDAQ:RUTH) today reported unaudited financial results for its second quarter ended June 26, 2016 and announced a quarterly cash dividend of $0.07 per share to be paid in the third quarter.
The Company reported net income of $6.9 million, or $0.21 per diluted share in the second quarter of 2016 compared to net income of $7.5 million, or $0.22 per diluted share in the second quarter of 2015.
Michael P. O'Donnell, Chairman and Chief Executive Officer of Ruth's Hospitality Group, Inc., noted, “While our results included another quarter of top-line growth and positive comparable store sales, we were disappointed that we were unable to surpass last year’s record second quarter net income. Simply put, we faced slower revenue growth and higher year-over-year labor costs."
O’Donnell continued, “More generally, we remain committed to our strategic plan of running high quality restaurants with a disciplined development plan. Our Ruth’s 2.0 menu initiative has been rolled out to all domestic restaurants and our operational excellence continues to be the strength behind our brand. Finally, we are very pleased to compliment these organic growth initiatives with a strong balance sheet and smart capital allocation decisions that include repurchasing 1.2 million shares during the quarter. As we look to the back half of the year, we believe that this balanced approach is the best way to create long-term shareholder return.”
Total revenues in the second quarter of 2016 were $92.7 million, an increase of 1.8% compared to $91.0 million in the second quarter of 2015.
Operating income in the second quarter of 2016 decreased 8.3% to $10.5 million, compared to $11.4 million in the second quarter of 2015. As a percentage of total revenues, operating margin decreased 120 basis points to 11.3% year-over-year.
During the second quarter of 2016, the Company repurchased 1.2 million shares of common stock under its current share repurchase program, for approximately $20.0 million or an average price of $16.78 per share.
At the end of the second quarter of 2016, the Company had $30 million in outstanding debt under its senior credit facility.
Subsequent to the end of the second quarter of 2016, the Company’s Board of Directors approved the payment of a quarterly cash dividend to shareholders of $0.07 per share. This dividend will be paid on August 25, 2016 to shareholders of record as of the close of business on August 11, 2016, and represents a 17% increase year-over-year.
During the second quarter, the Company opened one new Ruth’s Chris Steak House restaurant in Albuquerque, NM, and expects to open a new restaurant in El Paso, TX during the third quarter of 2016. New Ruth’s Chris Steak House restaurants in Cleveland, OH and Waltham, MA, previously expected to open in the fourth quarter of 2016, are now expected to open during the first half of 2017.
A franchise partner completed the relocation of a restaurant in Philadelphia, PA during the second quarter of 2016. New franchised restaurants are expected to open in Odenton, MD in the fourth quarter and Greenville, SC during the fourth quarter. Franchisees are currently expected to complete the relocation of restaurants in Huntsville, AL in the fourth quarter of 2016, and Mississauga, Canada during the first half of 2017.
Based on current information, Ruth's Hospitality Group, Inc. is reaffirming its full year 2016 outlook as follows:
The foregoing statements are not guarantees of future performance, and therefore, undue reliance should not be placed upon them. We refer you to our recent filings with the Securities and Exchange Commission for more detailed discussions of the risks that could impact our financial outlook and our future operating results and financial condition.
The Company will host a conference call to discuss first quarter 2016 financial results today at 8:30 AM Eastern Time. Hosting the call will be Michael P. O’Donnell, Chairman, President and Chief Executive Officer, and Arne G. Haak, Executive Vice President and Chief Financial Officer.
The conference call can be accessed live over the phone by dialing 719-325-2393. A replay will be available one hour after the call and can be accessed by dialing 858-384-5517; the password is 7947935. The replay will be available until August 5, 2016. The call will also be webcast live from the Company’s website at http://www.rhgi.com under the “Investor Relations” section.
Ruth's Hospitality Group, Inc., headquartered in Winter Park, Florida, is the largest fine dining steakhouse company in the U.S. as measured by the total number of Company-owned and franchisee-owned restaurants, with over 145 Ruth’s Chris Steak House locations worldwide specializing in USDA Prime grade steaks served in Ruth’s Chris’ signature fashion – “sizzling.”
For information about our restaurants, to make reservations, or to purchase gift cards, please visit http://www.RuthsChris.com. For more information about Ruth’s Hospitality Group, Inc., please visit http://www.rhgi.com.
This press release contains “forward-looking statements” that reflect, when made, the Company’s expectations or beliefs concerning future events that involve risks and uncertainties. These forward-looking statements include all statements other than those made solely with respect to historical facts and include, but are not limited to, statements regarding the Company’s financial outlook, objectives, plans and goals. Forward-looking statements frequently are identified by the words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “project,” “will be,” “will continue,” “will likely result,” or other similar words and phrases. Actual results could differ materially from those projected, implied or anticipated by these forward-looking statements. Some of the factors that could cause actual results to differ include: reductions in the availability of, or increases in the cost of, USDA Prime grade beef, fish and other food items; changes in economic conditions and general trends; the loss of key management personnel; the effect of market volatility on the Company’s stock price; health concerns about beef or other food products; the effect of competition in the restaurant industry; changes in consumer preferences or discretionary spending; labor shortages or increases in labor costs; the impact of federal, state or local government regulations relating to Company employees, the sale or preparation of food, the sale of alcoholic beverages and the opening of new restaurants; harmful actions taken by the Company’s franchisees; the Company’s ability to protect its name and logo and other proprietary information; the impact of litigation; the restrictions imposed by the Company’s Amended and Restated Credit Agreement; changes in, or the discontinuation of, the Company’s share repurchase program or dividend payments; and the risk factors or uncertainties identified in the reports the Company files with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the fiscal year ended December 28, 2014 and subsequently filed Quarterly Reports on Form 10-Q, all of which are available on the Securities and Exchange Commission’s website at http://www.sec.gov. All forward-looking statements are qualified in their entirety by this cautionary statement, and the Company undertakes no obligation to revise or update this press release after the date hereof, whether as a result of new information, future events or otherwise.