RT - Comments from Investor Conference

We just heard from RT last week when the company reported its 4Q earnings so today we heard more of the same as it relates specifically to RT. RT's CEO Sandy Beall did say, however, that he is seeing more discounting within casual dining now than in the spring. We will be learning more about calendar 2Q results in the coming weeks and how casual dining margins fared overall, but this statement could point to increased margin pressure in the current quarter. A large number of companies, including RT, have been able to cut costs to partially offset the significant level of discounting, but a second round of cuts will be more difficult without impacting the customer experience.


RT said it will begin in January to execute against its goal of increasing average check to $12.50 to $14.50 from about $11.50. That being said, the company has not increased its prices in about 3 years. Although RT has been successful in driving increased traffic as of late, it has done so by better marketing its value offerings. It will become increasingly difficult for the company to raise its prices as it has trained its customers for the last 3 years to expect a lower average check. We will have to wait and see...


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