Ruth’s Hospitality Group (NASDAQ: RUTH) stock gained on Friday after the restaurant operator exceeded profit estimates for the second quarter.
In Friday’s premarket hours, the Florida-based chain posted non-GAAP EPS of $0.44, well above the $0.31 expectation, alongside only a narrow miss on revenue. Of particular note, the company’s financials revealed that food and beverage costs, as a percentage of restaurant sales, decreased 56 basis points from the previous year while beef costs decreased 6% over the same period. The come-down in commodity costs helped the company in maintaining margins.
“We generated double-digit comparable sales and solid margins, which led to adjusted earnings per share growth of 20% compared to 2021 and 41% compared to 2019,” CEO Cheryl Henry said. “Combined with our balanced and consistent approach to capital allocation, we believe Ruth’s Chris is ideally positioned to drive value for shareholders over the long run.”
Labor expenses are also anticipated to moderate through the back half of 2022.
Elsewhere, the company approved a new $60M share repurchase program and a $0.14 per share quarterly dividend.
Shares rose 1.96% in mid-day trading on Friday after posting the results.