Investing in Ruby Tuesday (NYSE:RT)

Jeff Siegel

Written By Jeff Siegel

Posted October 9, 2014

rtI guess Ruby Tuesday (NYSE: RT) sold a crap ton of mozzarella sticks and cheese fries this past quarter.

Yesterday afternoon, the popular chain restaurant posted a narrower-than-expected loss and boosted its 2015 profit margin forecast. The market rewarded RT with a 20% pop.

Chief Executive James Buettgen commented, saying the company’s fiscal 2015 plan is focused on menu improvements and guest experience.

I’m not exactly sure what kind of menu improvements will be made. I mean, the food at most of these places is borderline inedible and always wages war against my intestinal microbiota. My colon is rarely pleased when I slum it in one of these joints, too.

Of course, I’m an admitted food snob – or rather one who enjoys “real” food instead of mass produced toxic slop. But hey, that’s just me. Most folks, however, seem to be completely satisfied feeding from troughs of industrialized grub. And that’s fine.

The Guest Experience

guestNow the “guest experience” part is a bit kooky.

And by the way, can we please stop calling customers guests?

If I walk into a restaurant, my intention is to pay for food. That makes me a customer. So unless my aunt Rhea is cooking and serving the food, and I’m not going to be charged, I am not a guest.

As far as improving the guest, I mean, customer experience? Well, I suppose I wouldn’t mind a shoulder massage or some free booze. But seriously, just don’t be rude and don’t spit in my food. Follow those simple rules, and your servers will get a 20% tip every time.

Of course, what do I know? I’ve never run a restaurant chain. The closest I’ve ever come to such a thing was when I worked as a fry cook at Burger King at the ripe old age of 15. I also had the very brief adventure of washing dishes at a Sizzler at the ripe old age of 16. I quit though, because the manager promised me a free dinner for every shift I worked, but then charged me $0.10 for ordering a second piece of cheese bread. That really happened.

In any event, I don’t know the first thing about running a chain restaurant, but clearly the folks over at Ruby Tuesday do. And while I don’t typically invest in restaurant stocks – except for Chipotle (NYSE:CMG), which kicks ass and has made me both delicious veggie burritos and boat load of cash – there are plenty of folks who do. And some of those folks are probably quite happy today. So for them, congratulations on the gains! And congratulations to the company on an impressive quarter. But for the record, I still think the food there pretty much sucks.

As a side note, I do recall Ruby Tuesdays having the balls and decency to offer a few organic items on their menus a few years back. Does anyone know if the company still does that? If so, I take back my “their food sucks” comment.

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