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Analysts Call Attention: Ruth’s Hospitality Group, Inc. (NASDAQ: RUTH)

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Ruth’s Hospitality Group, Inc. (NASDAQ: RUTH) newly stated unaudited fiscal results for its 3rd-quarter finished September 29, 2k19.

Highlights for the 3rd-quarter of 2k19 were as follows:

  • Total revenues in the 3rd-quarter of 2k19 turned up 4.00 percent to $103.00M in contrast to $99.00M in the 3rd-quarter of 2k18.
  • Net income in the 3rd-quarter of 2k19 turned up 25.70 percent to $4.50M, or $0.160 for each diluted share, a contrast to net income of $3.60M, or $0.120 for each diluted share, in the 3rd-quarter of 2k18.

– Net income in the 3rd-quarter of 2k19 included $0.30M in acquisition-related costs associated with the acquisition of the three restaurants from our Philadelphia and Long Island franchisee and a $0.30M income tax benefit related to the impact of discrete income tax items. Net income in the 3rd-quarter of 2k18 included $0.40M in acquisition-related costs associated with the acquisition of the six restaurants of our Hawaiian franchisee, in addition to a $0.10M income tax benefit related to the impact of discrete income tax items.

– Apart From these adjustments, in addition to the results from suspended operations, non-GAAP diluted earnings for each common share were $0.150 in the 3rd-quarter of 2k19, a contrast to $0.130 in the 3rd-quarter of 2k18. The Company believes that non-GAAP diluted earnings for each common share provide a useful alternative measure of financial performance to improve comparability of diluted earnings for each common share between durations. Shareholders are advised to see the attached Reconciliation of Non-GAAP Financial Measure table for additional information.

  • Throughout the 3rd-quarter of 2k19, the Company accomplished the acquisition of three franchised restaurants with two in the Philadelphia, PA area and one on Long Island, NY in addition to development rights for this territory.
  • The Company returned $17.30M through dividends and share repurchases throughout the 3rd-quarter of 2k19.

Cheryl Henry, President and Chief Executive Officer of Ruth’s Hospitality Group, Inc., stated, “I’m happy with the strength of our 3rd-quarter results counting a comp sales incline of 0.60 percent and Pro-forma earnings for each share of $0.150. I’m particularly proud of the commitment to excellence from our team and our franchise partners, who through their execution delivered these achievements in spite of weather-related headwinds and a 19.00 percent incline in beef costs throughout the quarter.”

Review of 3rd-Quarter 2k19 Operating Results

Restaurant sales in the 3rd-quarter of 2k19 turned up 4.00 percent to $97.20M in contrast to $93.50M in the 3rd-quarter of 2k18. Average unit weekly sales were $93.40 thousand in the 3rd-quarter of 2k19, a boost of 0.50 percent contrast to $92.90 thousand in the 3rd-quarter of 2k18.

Company-owned Sales

  • Comparable restaurant sales at Company-owned restaurants turned up 0.60 percent contrast to the 3rd-quarter of 2k18, which consisted of a 1.70 percent decline in traffic, as measured by entrees, and an average check incline of 2.30 percent. Comparable restaurant sales and traffic were negatively influenced by 30.0 to 40.0 basis points because of the effects of Hurricane Dorian, and to a lesser degree Tropical Storm Barry, which resulted in eleven lost operating days combined throughout the 3rd-quarter.
  • 81 Company-owned Ruth’s Chris Steak House restaurants were open at the end of the 3rd-quarter of 2k19, contrast to 78 Ruth’s Chris Steak House restaurants at the end of the 3rd-quarter of 2k18. Total operating weeks for the 3rd-quarter of 2k19 turned up to 1,041 from 1,006 in the 3rd-quarter of 2k18.

Franchise Income

  • Franchise income in the 3rd-quarter of 2k19 was $3.90M, a decline of 2.50 percent contrast to $4.00M in the 3rd-quarter of 2k18. The decline in franchise income was driven mainly by the recent franchise acquisition, which reduced franchise income by $125.00 thousand.
  • 73 franchisee-owned restaurants were open at the end of the 3rd-quarter of 2k19 contrast to 75 at the end of the 3rd-quarter of 2k18.

Operating Costs

  • Food and beverage costs, as a percentage of restaurant sales, turned up 140.0 basis points to 29.60 percent as a contrast to the 3rd-quarter of 2k18, mainly driven by a 19.00 percent incline in total beef costs.
  • Restaurant operating costs, as a percentage of restaurant sales, reduced 40.0 basis points to 52.70 percent as a contrast to the 3rd-quarter of 2k18, mainly because of lower incentive-based compensation.
  • Marketing and advertising costs, as a percentage of total revenues, reduced 80.0 basis points to 3.10 percent in contrast to the 3rd-quarter of 2k18. The decline as a percentage of total revenues, was mainly driven by the planned shift in marketing tactics across the durations.
  • General and administrative costs, as a percentage of total revenues, reduced 80.0 basis points to 8.10 percent as a contrast to the 3rd-quarter of 2k18. The decline as a percentage of total revenues was mainly driven by lower performance-based compensation, cost administration programs, and lower acquisition deal costs.
  • Income tax cost was $0.40M in the 3rd-quarter of 2k19 contrast to $0.70M in the 3rd-quarter of 2k18, a 42.00 percent decline. The decline was driven mainly by a larger benefit from discrete income tax items in the 3rd-quarter of 2k19.

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