The restaurant with the eponymous name of the 1960s Rolling Stones hit, Ruby Tuesday‘s (NYSE:RT) business has been just as much of a hit since starting out in 1972.
RT operates 750 stores in 39 states, generating $1.32 billion in revenues while earning $19.5 million. Ruby Tuesday’s 3.35% return on equity is not particularly strong, and an expensive private offering of $250 million in 7.625% senior notes will be used to repay revolving debt, mortgage obligations and possibly repurchase common stock.
Presently, RT does not pay a dividend, so investors will have to hope for better future earnings, or perhaps a bump from similar earnings against fewer shares. However, the company is going under a reimaging and will do so under new leadership, so Ruby Tuesday has potential, but should be handled with care.