Ruby Tuesday CEO Resigns
September 13 2016 - 7:40PM
Dow Jones News
Ruby Tuesday Inc. Chief Executive James J. Buettgen has
resigned, the company said Tuesday, one month after the restaurant
operator said it would close about 13% of its locations amid
declining sales.
The board called for Mr. Buettgen's resignation because of the
company's poor performance, according to a person familiar with the
situation.
"There is a sector decline and they are in the midst of it," the
person said, adding that the company's slide in revenue, combined
with softness in the casual dining sector, was "a problem."
Neither Mr. Buettgen nor a company spokesperson could be reached
immediately for comment.
Mr. Buettgen joined the company in December 2012 after serving
as chief marketing officer of Darden Restaurants Inc., according to
Ruby Tuesday's website. When he was hired, the company cited Mr.
Buettgen's strategic thinking and brand marketing experience.
His resignation as CEO is effective immediately. The board
appointed F. Lane Cardwell Jr. as interim CEO until a successor is
found. Mr. Buettgen, who also served as chairman, won't stand for
re-election at Ruby Tuesday's annual shareholders meeting on Oct.
5, and lead director Stephen Sadove has been named nonexecutive
chairman.
Mr. Cardwell, a Ruby Tuesday director, has previously been CEO
of Boston Market Corp. and president of P.F. Chang's China Bistro
Inc.
The Tennessee-based chain said that for the three months ended
Aug. 30, its first fiscal quarter, revenue fell to a
worse-than-expected $256.7 million. Analysts were expecting $263
million, according to Thomson Reuters. The company also expected
its loss per share to range between 10 cents and 12 cents; analysts
anticipated a loss of a penny a share.
Same-restaurant sales declined 2.7% in the period.
Ruby Tuesday in August said it would shut 95 underperforming
locations as it reported a roughly 6% drop in revenue, which was a
reversal from an improvement reported in recent periods. As of
Tuesday, all 95 locations had been closed, the company said.
Retailers are facing dwindling traffic, crimping sales as
shoppers' shift to online options such as Amazon.com. Restaurant
chains like Ruby Tuesday—often found in malls—also are feeling the
pinch.
Restaurants also have been losing traffic as they have raised
menu prices to compensate for rising labor costs. The widening gap
between restaurant and grocery prices has caused many consumers to
eat at home.
The second quarter of the calendar year was the industry's
weakest since the first quarter of 2010, with overall restaurant
same-store sales flat versus up 1% in the first quarter and up
nearly 3% in 2015. Three segments turned negative in the quarter,
including the casual-dining sector in which Ruby Tuesday falls.
Fast casual and family-dining chains were the others that turned
negative, and sales growth in every other restaurant category
slowed except pizza, according to investment firm William
Blair.
Ruby Tuesday also said it named Sue Briley as chief financial
officer. She had been in the role on an interim basis since
June.
Julie Jargon contributed to this article.
Write to Joann S. Lublin at joann.lublin@wsj.com and Joshua
Jamerson at joshua.jamerson@wsj.com
(END) Dow Jones Newswires
September 13, 2016 19:25 ET (23:25 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
Darden Restaurants (NYSE:DRI)
Historical Stock Chart
From Apr 2024 to May 2024
Darden Restaurants (NYSE:DRI)
Historical Stock Chart
From May 2023 to May 2024