MARYVILLE, Tenn. -- Ruby Tuesday Inc. said Wednesday that its net income declined in the fiscal first quarter ended Sept. 4 on costs related to its search for a new CEO.
The operator of the Ruby Tuesday, Lime Fresh and Marlin & Ray's chains said sales improved for the first time in seven quarters. It also reported more revenue from company owned locations open at least a year.
Investors were not impressed, and Ruby Tuesday shares lost 51 cents, or 7.3 percent, to $6.51 in after-hours trading.
Net income dropped to $2.6 million, or 4 cents per share, from $3.1 million, or 5 cents per share in the same period a year ago. Excluding one-time items, such as costs related to its search for a replacement for Chairman and CEO Sandy Beall, Ruby Tuesday made 5 cents per share. The company has closed dozens of restaurants over the last year, but revenue edged up 1 percent, to $332.9 million.
Analysts expected net income of 5 cents per share and $330.5 million in revenue, according to FactSet.
Ruby Tuesday said in June that Beall, the company's founder, had decided to step down as CEO and from the board of directors once a replacement was found. The company said Wednesday that it hopes to name a CEO before the end of the year.
Revenue from company owned restaurants open at least a year grew 1.9 percent. That same-restaurant sales figure excludes sales from locations that have opened or closed within the past 12 months, making it a key measurement of how the company's restaurants are doing.
At the end of the quarter Ruby Tuesday had 712 company owned locations and 78 franchised stores in 45 states, the District of Columbia, Guam, and 12 foreign countries. It had 746 company owned and 95 franchised stores a year ago.
In fiscal 2013 Ruby Tuesday expects net income of 24 to 34 cents per share, excluding costs related to its CEO pension settlement and transition costs. Analysts forecast net income of 28 cents per share.
The company expects same-restaurant sales will range from flat to up 2 percent. It plans to open 12 to 16 Lime Fresh locations, close four to six Ruby Tuesday's restaurants, and convert five to seven Ruby Tuesday's locations to Marlin & Ray's. It said franchisees will open 10 to 12 locations. As many as 10 of those will be outside the U.S. Two to four franchised locations will be closed.