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More signs of distress are coming from the casual dining sector on Thursday.
Ruby Tuesday, the struggling restaurant chain, reported its 19th straight quarter of revenue decline as it struggled to adapt to changing consumer habits and rising competition.
The company, which announced last month that it was exploring strategic alternatives including a potential sale or merger, saw like-for-like sales drop 4 per cent in the three months to end of February. Revenue slumped nearly 17 per cent to $225.7m during the period as the weak sales trend was compounded by the closure of over 100 stores.
“The casual dining environment remains highly challenging, promotional, as well as price competitive and our sales trends are reflective of these conditions,” the company said in a statement.
A fixture near America’s shopping centres, Ruby Tuesday — whose menu runs the gamut of steaks, seafood, burgers and salad bars — has seen its fortune hit by a confluence of trends, including falling mall foot traffic, rising consumer demand for healthier fare and food price deflation that has made it more appealing to cook rather than eat out, as well an explosion of new entrants in the fast casual dining space in recent years.
The company has not reported a revenue gain since its fiscal fourth quarter in 2012.
Net loss for the February quarter widened to $19.8m, or 33 cents per diluted share, compared to a loss of loss of $3.1m, or 5 cents a share, in the prior-year period.
In a separate release, the company announced that it has appointed James F. Hyatt II as president and chief executive with immediate effect.
Shares in Ruby Tuesday have shed nearly 50 per cent of their value over the past 12 months, giving the company a market cap of just $168.2m.
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