According to the law firm press release, Ruby Tuesday, together with its subsidiaries, owns, develops, operates, and franchises a chain of hundreds of casual dining restaurants in the United States and internationally.
The complaint alleges that during the Class Period, Ruby Tuesday issued materially false and misleading statements regarding the Company’s financial performance and future prospects and failed to disclose the following adverse facts: (i) that changes made to the menu at the Company’s flagship Ruby Tuesday chain to increase the range of offerings and price points were negatively impacting sales, as the average sales check price was declining without contemporaneous increases in traffic; (ii) that contrary to the reported progress being made in a turnaround effort, same-store sales were continuing to decline exponentially at the Company’s flagship Ruby Tuesday chain; (iii) that the Company had experienced a dramatic decline in sales at its Lime Fresh Grill restaurants, and as a result, the carrying value of that chain’s goodwill, trademark and properties and equipment was materially impaired; (iv) that the Company’s expenses and losses were being materially understated; (v) that the value of the Company’s deferred tax assets were overstated; and (vi) that based on the foregoing, defendants lacked a reasonable basis for their positive statements about the Company’s business during the Class Period. As a result of these false and misleading statements and omissions, Ruby Tuesday common stock traded at artificially inflated prices during the Class Period.
On July 24, 2013, defendants reported Ruby Tuesday’s fourth quarter and fiscal 2013 financial results, including declining same-restaurant sales at the flagship Ruby Tuesday restaurants and a $27 million fourth quarter 2013 net loss from continuing operations due in large part to an impairment of the Lime Fresh Grill trademark and related assets and taking a valuation allowance on the Company’s deferred tax assets. On this news, the Company’s stock price fell, closing down at $7.84 per share on July 25, 2013. Then, on October 9, 2013, the Company reported a significant decline in first quarter 2014 revenues and an increase in net losses, driven by further severe same-store sales declines at the flagship Ruby Tuesday restaurants, which the Company disclosed would last at least through the second quarter 2014. On this news the Company’s stock price fell further, closing at $6.26 per share on October 10, 2013.
On October 1, 2014, the Court issued an Order appointing lead plaintiff and approving lead counsel. Lead Plaintiff filed a consolidated complaint on December 15.
On March 31, 2016, the Court issued an Order granting in part and denying in part Defendants' Motion to Dismiss.
On April 21, 2016, the Court approved the appointment of a new Lead Plaintiff.
On March 29, 2017, the parties entered into a Stipulation of Settlement.