Ruth's Hospitality Group posts Q3 earnings of US$85,000, with revenue rising 2% year-over-year to $80.2 million

Nevin Barich

WINTER PARK, Florida , October 26, 2011 (Associated Press) – Restaurant operator Ruth's Hospitality Group Inc. on Wednesday reported a third-quarter profit as sales improved at its Ruth's Chris Steak House chain.

Many consumers began to eat out less during the recession. That trend has been slowly improving, but consumers continue to spend cautiously as the economy remains uncertain.

Restaurant chains are also facing higher food costs. The Winter Park, Fla.-based company said Wednesday that it spent more on food during the quarter as prices for beef, dairy, oil and grain-based products rose.

Ruth's net income totaled $85,000, or break even per share, compared with a year-ago net loss of $477,000, or a penny per share. Analysts had expected net income of a penny per share in the July-September quarter, according to FactSet.

"While our profit was modest this quarter, it was significant in that it was our first profit in four years in what is our seasonally weakest quarter from a sales perspective," said CEO Michael P. O'Donnell.

Revenue rose 2 percent to $80.2 million from $78.6 million, but was short of the $82.2 million analysts expected.

Revenue in Ruth's Chris Steak House restaurants open at least one year rose 2.6 percent. Customers spent 1.2 percent more on entrees during the quarter, while average checks rose 1.4 percent.

Revenue in restaurants open at least a year is an important gauge of a retailer's financial health because it excludes results from stores that open or close during the year. The figure fell 0.7 percent at the company's Mitchell's Fish Market chain.

In addition to Ruth's Chris, Ruth's Hospitality Group also owns the Mitchell's Fish Market, Mitchell's Steakhouse and Cameron's Steakhouse concepts. The Heathrow, Fla., company has about 150 company or franchisee-owned locations worldwide, about 130 of which are Ruth's Chris Steak Houses.

Shares rose 6 cents, or 1.3 percent, to $4.66 in afternoon trading.