Lower beef prices and sales leaps buoyed profits at Ruth's Hospitality Group during the second quarter ended June 28, the company said Friday.
Net income at the steakhouse company, which operates the Ruth’s Chris brand, increased nearly 9 percent during Q2, to $7.5 million from $6.9 million during the same period last year. In addition, comp sales at company-owned locations increased 4.2 percent year over year, driven by an average check increase of 3.5 percent and a 0.7 percent jump in traffic.
The company benefited from declining food and beverage costs, which, as a percentage of restaurant sales, decreased to 30.5 percent, driven largely by a 2 percent year-over-year decrease in the price of beef. Those gains may be somewhat tempered throughout the rest of the fiscal year, however, as executives noted on an earnings call Friday that beef prices are expected to increase by 3 to 6 percent during the second half of 2015.
Total revenues for the company were $91 million, up 9.7 percent from the same quarter last year.
“Our topline momentum and strong operational execution enables us to generate another quarter of strong earnings growth,” Michael O’Donnell, CEO of Ruth’s Hospitality Group. “As we look forward, we intend to continue to manage our business with a balanced approach of reinvesting in our core operations, maintaining disciplined growth and returning to excess capital, pursuing a strategy that we believe can deliver consistent and meaningful shareholder returns over the long term.”
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