Ruby Tuesday F4Q09 (Qtr End 6/2/09) Earnings Call Transcript

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2009-07-07 16:35:43.0

Tags: Advertisement, Seafood, Wells Fargo & Co., Call Transcript, Ruby, Earnings, Promotion, Seeking Alpha, Ruby Tuesday Inc.

Question-and-Answer Session

Operator

(Operator Instructions) Our first question is from the line of Jeffrey Omohundro with Wells Fargo.

Jeffrey Omohundro - Wells Fargo

Thanks. My question really goes to the challenge of balancing traffic without average check in this environment and establishing enhanced value. I’m curious if you could let us know how you see the usage of coupons and SSIs in this effort versus in-store menu enhancements, such as the lobster tail.

Samuel E. Beall

Well, I think it’s all important. I don’t think it’s one thing and I don’t think we’ll ever lock into one. It is menu promotion, as you mentioned, in the unit. I think lobster is also a great example of -- actually, the entire promotion is really seafood that we have in right now. We sell more seafood than anybody but Red Lobster. We’ve always been very strong in that. We sell over 20% of our menu mix in seafood, if I remember right. So that’s very, very important to us and I think as time goes on, our promotions, our dinner focus on our menu will allow us to get the check goals that we laid out a couple of years ago before this recession and that’s the $12.50 to $14.50 mark. That’s still what we are shooting for.

You know, a high quality promotion at different levels, whether it’s -- I mean, there are all kinds of different promotion tests we’ve done that are incentives to get people to come in and eat that delicious food that they are seeing in that full color picture I think in some ways is more lasting and more memorable than even television. It certainly is working for us but I don’t think it’s that much different than two for 20 or any lunch for $5 or $7.95 or whatever. You know, we’re not discounting our lower items; we’re only discounting our dinner items when we discount. But it all goes into a package combined with in-unit promotion, Internet and digital promotion, or digital advertising, et cetera. So it’s an important piece of the puzzle.

Jeffrey Omohundro - Wells Fargo

One follow-up to that -- it sounds like you are pleased with channels around the marketing spending that you’ve settle into. What about the dollar spending rate as we look into fiscal ’10? Thanks.

Samuel E. Beall

I think the dollar spending on -- when you promote, of course, that comes off of sales so it doesn’t count in advertising. If you really take the net cost of what you are promoting, I guess, and combine it with advertising, it’s probably similar to what we had year before last in expense. But I think what’s reflected -- did we give guidance on advertising? We didn’t, did we? SG&A? But it’s -- since it’s advertising only, we’re not doing that much, it’s -- well, I shouldn’t say we didn’t give guidance on that.

 

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