In response to a poor fiscal fourth quarter, the Ruby Tuesday franchise will close the doors on approximately 95 underperforming restaurants, according to a press release on the company's website.
The locations will completely cease operations by September 2016, the press release said. It has not been released which locations will be closed. The president and CEO of the company, JJ Buettgen, said the employees at the closing restaurants would be offered employment at other locations where possible.
"Performance at each of these locations, despite the loyalty of valued guests and the efforts of our dedicated employees, was not meeting expectations," said Buettgen. "Full-time and part-time employees impacted by closures will be offered positions in nearby restaurants where possible.”
The restaurants will close as a part of the company's Fresh Start Initiative, which aims to streamline the organization, improve profitability and revitalize the dining experience and menu offerings for customers, according to the press release.
The choice to close the restaurants came as a result of a comprehensive review of the company's finances and corporate-owned restaurant portfolio. According to the company's website, there were 724 Ruby Tuesday restaurants in 44 states, 14 foreign countries and Guam as of May 31, 646 of which are corporate-owned. The company is a publicly traded company on the New York Stock Exchange.
The stock of the company slid 12.9 percent after reports of weak sales, according to the Associated Press. The stock lost 48 cents and is now valued at $3.25 per share.
According to the company's website, in the fiscal fourth quarter, which ended May 31, total revenue declined by 5.9 percent to $279.3 million. For the entire 2016 fiscal year, the company's total revenue declined 3.1 percent to $1.1 billion. The 3.1 percent loss totaled about $35.3 million from the previous fiscal year.
"Our fourth quarter was impacted by softness in the casual dining industry and increased promotional activity by our peers," said Buettgen. "The decision to close restaurants is a difficult but necessary step as we take aggressive actions to strengthen our organization."