Ruby Tuesday's CEO Steps Down

Ruby Tuesday 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, 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