Ruby Employs Darden Official as CEO - Analyst Blog
26 Novembre 2012 - 5:20PM
Zacks
Ruby Tuesday
Inc.’s (RT) 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 Board.
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. (DRI)
– 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.
(EAT) and General Mills Inc. (GIS) 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 surge
ahead.
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.
DARDEN RESTRNT (DRI): Free Stock Analysis Report
BRINKER INTL (EAT): Free Stock Analysis Report
GENL MILLS (GIS): Free Stock Analysis Report
RUBY TUESDAY (RT): Free Stock Analysis Report
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