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4 Restaurants That Could Join Sbarro in Bankruptcy

These mid-tier restaurants could be too far underwater in the foreseeable future

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Ruby Tuesday (RT)

Restaurants-RT-stock-sbarro-bankruptcyNot that Ruby Tuesday (RT) was ever really lighting it up on the revenue or earnings front, but the past three quarters’ revenue has been so weak, the company slid from breakeven levels to sizeable losses … with no end in sight for its restaurants.

Specifically, in the past three quarters, Ruby Tuesday’s top line has fallen 13%, 13%, and 9%, respectively, driving the company deep into the red ink. For the fourth quarter of last year, the net loss was a whopping 12.6% of sales — the worst showing from the company in years.

The end result is a current cash balance of only $24 million. That’s not much for a restaurant chain of this size. It’s bad enough that the company recently decided to shutter 30 restaurants, for perspective.

One of its key creditors was willing to cut Ruby Tuesday’s some slack, but more liquidity will mean nothing if the restaurant chain can’t pull in more customers, soon. And that’s the one aspect of the business the company doesn’t seem to have a compelling plan for.

Article printed from InvestorPlace Media,

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