Ruby Tuesday, Inc. Reports Fourth Quarter and Fiscal 2006 Diluted Earnings Per Share of $0.53 and $1.65, Respectively; and Announces Increased Dividend

Business Wire, July 11, 2006

MARYVILLE, Tenn. -- Ruby Tuesday, Inc. (NYSE:RI) today reported diluted earnings per share of $0.53 on net income of $31.7 million for the Company's fourth quarter of fiscal 2006 which ended on June 6, 2006. This represents a 33% increase as compared to $0.40 per diluted share on net income of $26.0 million for the fourth quarter of the prior year. The Company reminds investors that its fourth quarter of fiscal 2006 contained 14 weeks as compared to 13 weeks for the same quarter of the prior year due to the Company's 52/53 fiscal calendar. The Company estimates diluted earnings per share for the fourth quarter and fiscal year were positively impacted by approximately $0.04 as a result of the extra week. For the fiscal year ended June 6, 2006, the Company reported diluted earnings per share of $1.65 on net income of $101.0 million as compared to $1.56 on net income of $102.3 million for fiscal 2005. In addition, the Company announced its Board of Directors has approved a significant increase in its annual dividend from $0.045 per share to $0.50 per share to be paid on a semi-annual basis.

As previously released, same-restaurant sales at Company-owned Ruby Tuesday restaurants increased 2.9% and 1.4% for the fourth quarter and fiscal year, respectively. Same-restaurant sales at domestic franchise Ruby Tuesday restaurants increased 7.1% and 1.6% for the fourth quarter and fiscal year, respectively. For the fourth quarter, traffic decreased 0.5% at Company-owned restaurants, while increasing 4.0% at domestic franchise Ruby Tuesday restaurants.

Fourth quarter fiscal 2006 monthly period same-restaurant sales:

March -     April -     May -
                       Five weeks  Four weeks  Five weeks
                       ended       ended       ended       Fourth
                       April 4 (a) May 2 (a)   June 6      Quarter
                       ----------- ----------- ----------- -----------
Company-owned:
 Same-restaurant sales    5.7%        2.4%        0.5%        2.9%
Domestic Franchise:
 Same-restaurant sales    9.4%        7.3%        4.6%        7.1%


(a) - The Company notes that its five-week March period
same-restaurant sales were positively impacted and its four-week April
period same-restaurant sales were negatively impacted an estimated
1.0-1.5% due to the Easter holiday occurring during the Company's
April period in fiscal 2006 as opposed to its March period in fiscal
2005.

Other highlights for the 14-week fourth quarter include:

--Total revenue increased 23.3% over the same period of the prior year.

--Average restaurant volumes at Company-owned Ruby Tuesday restaurants increased 3.0% over the same period of the prior year.

--The Company opened eleven new Ruby Tuesday restaurants during the quarter, while one was closed.

--Franchisees opened nine new Ruby Tuesday restaurants during the quarter, while one was closed.

--Sales at franchise Ruby Tuesday restaurants (which is the basis for determining royalty fees included in franchise income on the Company's income statement) totaled $127,780,000 and $101,257,000 for the fourth quarter of fiscal 2006 and 2005, respectively.

--Capital expenditures were $41.0 million for the quarter.

--The Company repurchased 1.0 million shares of its common stock during the fourth quarter at an average price of $28.94 per share. As of the end of the fourth quarter, 5.2 million shares remained authorized for repurchase under the Company's ongoing share repurchase program.

--The Company had 58.2 million shares of common stock outstanding at the end of the quarter.

Fiscal Year 2006 Highlights

--Total revenue increased 17.6% over the prior year.

--Average restaurant volumes at Company-owned Ruby Tuesday restaurants increased 2.0% over the same period of the prior year.

--Fifty-six Company-owned Ruby Tuesday restaurants were opened, and six were closed.

--Thirty-two franchise restaurants were opened, and seven were closed.

--Sales at franchise Ruby Tuesday restaurants (which is the basis for determining royalty fees included in franchise income on the Company's income statement) totaled $458,712,000 and $422,505,000 for fiscal 2006 and 2005, respectively. The Company reminds investors that 44 restaurants were acquired by the Company during fiscal 2005 from franchisees subsequent to the first quarter.

--Capital expenditures were $171.6 million for the year.

--Total annualized management turnover (including management trainees) was 19% as of the end of the year.

--The Company repurchased 7.8 million shares (approximately 12%) of its common stock during fiscal 2006 at an average price of $24.16 per share.

Sandy Beall, Chairman and CEO commented, "Fiscal 2006 was a good year for us in many respects, and we were pleased to get back to reporting positive same-restaurant sales and diluted earnings per share growth throughout the course of the year, which enabled us to end the year with both sales and earnings being positive. We completed our transition from a coupon-based marketing approach to one based on television advertising, including a combination of local network and national cable advertising. In addition, we made great strides in our food and service initiatives. We also continued our investments in our team members, which has resulted in all-time low management turnover of below 20% including management trainees. We believe we have laid a solid foundation during fiscal 2006 upon which we can build an even greater company, and we are very excited about the plans we have going forward."