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Why is Ruby Tuesday (RT) Stock Plunging Today?

On Friday, shares of restaurant operator Ruby Tuesday RT have plunged around 15% in late-morning trading after the company posted weaker-than-expected third quarter fiscal 2016 results yesterday.

Ruby Tuesday reported earnings of $0.03 a share, missing expectations of $0.05 a share and falling flat in comparison to a year ago. Revenues came in at $271.5 million, also missing estimates of $284 million and dropping 5.1% on a year-over-year period. Same-store sales dropped 3.1%.

Guidance was subsequently lowered as a result. Ruby Tuesday now expects earnings for the year to be in the range of $0.05-$0.08 per share, drastically down from its previous outlook range of $0.12-$0.17 per share. Sales are also expected to fall 1% in fiscal 2016, compared to the past forecast of no growth to a 1% increase.

"Our third quarter was a volatile period affected by weather, softness in the casual dining industry, and increased promotional activity by our peers," CEO James Buettgen said.

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