Things have gone from bad worse at Ruby Tuesday, Inc. (NYSE:RT), days after the struggling restaurant chain posted disappointing quarterly earnings. The resignation of chief executive officer, James “JJ” Buettgen, all but underscores the mess the company finds itself in amidst waning investors’ confidence.
Buettgen’s resignation does not come as a surprise given that Ruby Tuesday has shed more than 60% in market value since he took over in 2012. The stock is currently down by 45% for the year. The restaurant chain has already appointed F. Lane Cardwell to act as the interim CEO with lead director Stephen Sadie assuming the role of non-executive board chairman.
“We would like to thank JJ for his dedicated service to Ruby Tuesday. During his leadership, JJ built a strong team, improved the health of the organization, and positioned the company to execute against its Fresh Start initiatives […],” said interim CEO.
Ruby Tuesday Woes
Ruby Tuesday has struggled to find itself a niche in the ever-evolving restaurant business. Sales have been awful the company having struggled to attract a good amount of traffic to its restaurant outlets. In the first quarter, sales were down by 2.7% leading to revenues of $256.7 million. Wall Street was expecting revenues of $263 million.
Concerned by declining sales, Ruby Tuesday has already confirmed plans to shut down up to 95 outlets across the country. Even with the closure, it still faces an uphill task to reinvigorate its growth prospects. Just like other fast food outlets, increased competition from the likes of Chipotle Mexican Grill, Inc. (NYSE:CMG) and Panera Bread Co (NASDAQ:PNRA) all but continues to spell trouble for the struggling chain.
Improvements on operations are much needed embattled fat food joint is to pick itself from the current mess. Such changes could come in the form of better menu offerings and improved lunch offerings if Ruby Tuesday, Inc. (NYSE:RT) is to have a chance of fending off competition and attracting customers in masses.