Ruby Tuesday Inc.
) search for a competent chief executive officer (CEO) has
finally come to an end. Recently, the company revealed that it
has appointed JJ Buettgen for the position of CEO and president,
effective December 1, 2012. Moreover, Mathew Drapkin, previously
the Lead Director, has now been assigned as Chairman of the
DARDEN RESTRNT (DRI): Free Stock Analysis
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The management churn came in the wake of the founder, chairman,
president and CEO Sandy Beall's resignation in June this year.
Since then, Knoxville, Tennessee-based Ruby Tuesday was on an
extensive lookout for a suitable replacement. During this session
of leadership changes, Beall continued to assume all three
aforesaid positions to ensure a smooth transition.
Sandy Beall is retiring after running the Tennessee-based company
for 40 years. Under his leadership, the company achieved new
heights in terms of overall performance and profitability,
implementation of strategies, and organic as well as inorganic
expansion. He opened the first Ruby Tuesday outlet in Knoxville,
Tennessee in the year 1972.
The newly appointed CEO, Buettgen, has donned many important
roles in his illustrious career. Before signing in for Ruby
Tuesday, Buettgen held the posts of senior vice president and
chief marketing officer at
Darden Restaurants Inc.
) - a renowned full-service restaurant operating company with a
multi-brand portfolio of more than 2,000 casual dining eateries
and combined revenues of more than $2,000 million.
Prior to that, Buettgen worked as senior vice president of
business development for Darden and as president for Smokey Bones
Barbeque & Grill. Buettgen was also associated with the
companies like Disneyland Resorts,
Brinker International Inc.
General Mills Inc.
) in his rich career of 20 years.
With his vast know-how in the restaurant and consumer industries,
Buettgen can easily be tagged as a veteran in these sectors.
Furthermore, with his affluent knowledge in business development
and brand building, we expect him to provide meaningful support
to Ruby Tuesday.
While we prefer the company's future strategies including
improving margins by lowering costs, driving same-restaurant
sales through several value offerings, focusing on low capital
growth opportunities and returning excess cash to shareholders,
its failure to meet the Zacks Consensus Estimates in the first
quarter of 2013 concerns us a bit. In addition, the company's
sales growth has also been sluggish and needs further impetus to
Hence, the new role for Buettgen invests him with additional
responsibility in a sluggish business environment. Ruby Tuesday
currently retains a Zacks #2 Rank, implying a short-term 'Buy'
rating on the stock. We are also maintaining our long-term
'Neutral' recommendation on the stock.