Robbins Arroyo LLP: Ruby Tuesday, Inc. (RT) Misled Shareholders According to a Recently Filed Class Action
May 6, 2016 (San Diego, CA & Maryville, TN) – Shareholder rights law firm Robbins Arroyo LLP announces that a class action complaint was filed against Ruby Tuesday, Inc. (NYSE: RT) in the U.S. District Court for the Southern District of New York. The plaintiff brings the complaint on behalf of all purchasers of Ruby Tuesday securities between July 24, 2015 and April 7, 2016, for alleged violations of the Securities Exchange Act of 1934 by Ruby Tuesday’s officers and directors. Ruby Tuesday, together with its subsidiaries, owns, develops, operates, and franchises casual dining restaurants in the United States and internationally.
Ruby Tuesday Accused of Providing Unobtainable Financial Guidance
According to the complaint, throughout 2015, Ruby Tuesday issued several press releases providing guidance for the fiscal year ending May 31, 2016, estimating that adjusted earnings per share would range from $0.12 to $0.17. Ruby Tuesday officials repeatedly reaffirmed this guidance for annual adjusted earnings per share in various conference calls and subsequent press releases. While Ruby Tuesday continued to reaffirm this guidance, its competitors were engaging in aggressive promotional activities, and many reports were released discussing the trend of declining customers and high competition in the casual dining restaurant industry. One such study noted that continuously falling guest counts were partially due to the effect of winter weather and stagnant growth in employment and wages.
The complaint alleges that Ruby Tuesday’s statements were false and misleading because: (1) fiscal year 2016 guidance was unobtainable and unrealistic; (2) promotional activity by its peers was adversely impacting Ruby Tuesday’s performance; and (3) the continuing decline in casual dining customers and traffic adversely impacted Ruby Tuesday’s performance. On April 7, 2015, Ruby Tuesday issued a press release revising guidance for fiscal 2016, stating, “Our third quarter was a volatile period affected by weather, softness in the casual dining industry, and increased promotional activity by our peers.” The company updated its annual adjusted earnings per share guidance to $0.05 to $0.08. On this news, Ruby Tuesday stock fell $0.62 per share, or over 11.8%, to close at $4.60 per share on April 8, 2016.
Ruby Tuesday Shareholders Have Legal Options
Concerned shareholders who would like more information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, or you can complete the form below and we will contact you directly.
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