Ruth’s Hospitality Group reports $17.6M net loss in 2nd quarter
Company has closed 5 of its steak houses
The Winter Park owner of Ruth’s Chris Steak House reported a net loss of $17.6 million for the quarter that ended June 28, but the business saw signs of improvement as dining rooms reopened from coronavirus restrictions.
Ruth’s Hospitality Group said Friday total revenue for the quarter was $28.4 million, compared with $110.2 million in the same quarter last year.
But in 24 company restaurants that had open dining rooms for the full month of June, sales were at 81% compared with those of last year, according to a news release.
“The performance of this group of restaurants provides an early, but meaningful insight into our near-term performance,” CEO Cheryl Henry said on a Friday earnings call. “These 24 restaurants had strong, positive restaurant operating margins, which were consistent with the solid margin levels we had during June of 2019 despite sales that were approximately 20% below last year.
“In fact, 16 of the 24 restaurants had better margins than in June of 2019.”
Ruth’s has permanently closed five companyowned restaurants and terminated leases at two of seven new locations the company was planning to open, CFO Arne Haak said. He added there are also at least five more sites that could be closed if the recovery slows or the company can’t get sufficient concessions from landlords.
The North Palm Beach Ruth’s Chris was set to close Friday, with 43 employees expected to be affected by the layoff, according to a July 24 notice sent to the state.
As of July 28, 52 company-owned restaurants had open dining rooms with capacity restrictions, 15 were operating with only outdoor seating and four were doing takeout and delivery. Ten restaurants remained closed.
There are 66 franchiseeowned restaurants with open dining rooms, one operating with just outdoor seating, and one doing only takeout and delivery. Four were still closed. A franchisee also permanently closed a Charleston, South Carolina, restaurant.
The company had a cash balance of $94 million as of July 28 and expects to have a weekly cash loss rate of $1 million in the third quarter, excluding out-of-period rent payments and closure costs, according to a news release.