Sandy Beall, founder and CEO of Ruby Tuesday Inc. (RT - Snapshot Report) recently announced his intention to bow out from management and the board. Since its inception, the company’s operating policy has been regulated by Beall, who is also the Chairman of the Board.
Ruby Tuesday will start to look for a suitable replacement immediately. A committee of the board will monitor the entire transition process. The committee intends to seek help from an executive search firm to find efficient successors for the aforesaid positions. During this session of leadership changes, Beall will continue to assume all three positions to ensure a smooth transition.
Sandy Beall is about to retire 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. Ten years later, the concept with all its 16 units was acquired by Morrison, Inc. During the following years, the chain kept flourishing and expanded to over 300 outlets. However, after doing a fairly good job, Ruby Tuesday spun off from Morrison Restaurants in 1996.
As of now, Beall, with more than 30,000 team members, is accountable for the company’s 740 owned and 85 franchised Ruby Tuesday restaurants. The company also owns and operates the fast-casual dining concept Lime Fresh Mexican Grill and the casual dining concept Marlin & Ray’s.
We appreciate 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.
Ruby Tuesday, which competes with Texas Roadhouse Inc. (TXRH - Snapshot Report), currently retains a Zacks #3 Rank, implying a short-term Hold rating. We are also maintaining our long-term Neutral recommendation on the stock.