Despite signs of slowing foot traffic, Ruth's Chris stock sizzles
In May a couple of high-end steakhouses will report earnings, and they may yet impress investors even if they have fewer diners coming in to eat.
Ruth's Hospitality ($NASDAQ:RUTH), which runs Ruth's Chris Steakhouse, saw a small decline in the number of Facebook "were here count," a foot-traffic metric tracking how many social posts are made at a specific location. Although "were here" count is still increasing (blue line), its doing so at the slowest rate since we started tracking the data in the summer of 2017.
Still, this hasn't gotten in the way of Ruth's Hospitality stock. Shares are up more than 14% year to date, as of the close of the market Wednesday May 1. The restaurant chain will next report earnings Friday May 3.
Ruth's Hospitality saw foot traffic fell 2.5% for its Q4-2018 report, but evened it out with 2.5% bigger checks. Ruth's was also aided by falling beef prices.
Ruth's wasn't alone; its competitor Del Frisco's ($NASDAQ:DFRG) recorded check increases of 5.9% for its Q4-2018 earnings, not counting brands Barcelona and bartaco. The company reports earnings Tuesday May 7.
Some headwinds remain, however. The price of beef already rebounded off 2018 lows, and Texas Roadhouse missed earnings expectations on April 29, which its leadership chalked up to rising labor costs.
Both of those factors will be worth watching in Ruth's and Del Frisco's upcoming announcements.