The Heathrow, Florida-based Ruth’s Hospitality Group Inc (RUTH), a leading upscale dining operator, recently reported preliminary sales results for the fourth quarter of 2010. The company expects to report its full results on February 18, 2011.

The company owned restaurants sales inched up 8.0% year over year to $90.4 million for the reported quarter. Company-owned comparable restaurant sales at Ruth’s Chris Steak House grew 9.2%, of which 1.6% growth was driven by the opening of new units during the quarter. Company-owned comparable restaurant sales at Mitchell’s Fish Market slipped 2.2%.

Ruth’s Hospitality also experienced a 16% improvement in private dining sales, which indicates an increase in spending by higher income groups.

During the third quarter of 2010, the company, which owns the Ruth’s Chris Steak House, Mitchell’s Fish Market, Mitchell’s Steakhouse and Cameron’s Steakhouse reported total revenue of $79.8 million, up 4.6% from the prior year quarter.

The upside in revenues was driven by the strongest same-store sales growth at Ruth’s Chris brand since the fourth quarter of 2006 and 1.2% rise in operating weeks. Company-owned restaurant sales soared 4.4% to $76.9 million whereas franchise income jumped 11.7% to $2.6 million. Comparable restaurant sales at Ruth’s Chris Steak House spiked 4.9%, whereas comparable restaurant sales at Mitchell’s Fish Market dropped 2.8%.

The Zacks consensus sales estimates for the fourth quarter and fiscal 2010 are $91.0 million and $355.0 million, respectively. The Zacks Consensus EPS estimate for the fourth quarter of 2010 is 7 cents and for fiscal 2010 is 30 cents. The estimates have remained unchanged over the last 60 days. Hence we do not foresee any surprises during earnings and expect the company to report in-line results.

Ruth’s Hospitality currently retains a Zacks #2 Rank, which translates into a short-term Buy rating. We also maintain our long-term Neutral recommendation on the stock.

One of Its prime competitors Ruby Tuesday Inc. (RT) reported second quarter 2011 adjusted earnings of 7 cents per share surpassing the Zacks Consensus Estimate by 2 cents. The strong results were driven by  top line growth.

 
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