Ruby Tuesday's growth strategy calls for a shift in emphasis toremodelings, although the company still plans to add new units.Beall commented, "Our priority is on achieving positivesame-restaurant sales. It's where we have the most potential ofincreasing return on invested capital for our shareholders. Basedon that, we are investing more capital in existing assets byaccelerating our remodelings during the fiscal year."

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With 933 Ruby Tuesday restaurants in 45 states and overseas,including both company-owned and franchised operations, RubyTuesday's goal is to complete remodels of substantially allcompany-owned restaurants. Along with that goal it is being moreselective on new locations.

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The company's plans call for the opening of 20 to 25company-owned restaurants in the coming year and 25 to 35 franchiselocations. Commented Beall, "We do not intend to let the currentsales environment detract from our focus on doing what is rightlong-term for our guests and shareholders. We will continue tobuild a fresh new brand."

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Beall cited a new summer menu and other initiatives designed tobuild customer loyalty at the chain, which opened a net of sevennew restaurants during the quarter. The seven new restaurantsincluded two company-owned locations and five by domestic andinternational franchisees.

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For the full year, the company opened 45 new Ruby Tuesdays andacquired 28 from Florida franchisees. It closed 15 restaurants andsold or leased seven to existing franchisees. Domestic andinternational franchisees opened a net of 23 new locations.

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Ruby Tuesday's fourth-quarter results showed earnings per shareof 46 cents on net income of $24.7 million, compared with 53 centsper share and net income of $31.7 million in the fourth quarter oflast year. The company said that this year's earnings would havebeen closer to last year's without the impact of certain one-timecharges, but the net would still have come in slightly below lastyear's figure.

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Fourth-quarter same-store sales decreased 3.9% and 2.1% atcompany-owned and domestic franchise Ruby Tuesday restaurants,respectively, as compared to positive same-restaurant sales of 2.9%and 7.1% in the fourth quarter of the previous year. The figure fortotal sales dipped to $357 million, compared with $364 million inthe fourth quarter of last year, which was a 14-week quartercompared with this year's 13-week quarter.

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For the full year, the restaurant chain reported dilutedearnings per share of $1.59 on net income of $91.7 million,compared with $1.65 a share on net income of $100.1 million forfiscal 2006. As with the quarterly results, the full-year earningsdipped because of one-time charges, but would have risen to about$1.75 per share without those charges, the company said. Salestotaled $1.4 billion for the year, compared with $1.3 billion theyear before, even though this year was a 52-week period versus the53-week period the previous year.

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