Last year we wrote several articles about Darden Restuarants owners of Olive Garden, Red Lobster and Longhorn Steakhouse. Specifically, how their progressive ideology disconnects them from business sense. At the time we spotlighted a few specific examples from their ideological organization, and flawed business model. We penned:
[...] You see the point is, Progs believe in their progressive ideology with such core reverence, they are constitutionally incapable of seeing how detached they are from the rest of us. It is an emotion over logic thing for them.
That’s why they look at each other cross-eyed, whether in the Olive Garden board room, or the MSNBC punditry round table following the Wisconsin Election.
The problem really began in 2011 when they decided to join Michelle Obama:
September 15th 2011 Olive Garden Media Announcement - First Lady Michelle Obama gave her support Thursday to healthful menu changes at Darden Restaurants, the parent company of mega-chains such as Olive Garden and Red Lobster. The company announced Thursday it’s cutting calories and sodium in all of its restaurants, offering more healthful choices on its kids’ menus and revamping other food choices.
Darden Restaurants Inc. is pledging to cut calories and sodium in its meals by 20 percent over a decade. Among promised changes for children, a fruit or vegetable side and low-fat milk will become standard with kids’ meals unless a substitution is requested.
Yes, you read that right. The food police, nanny statist and tamale loving FLOTUS, talked her prog pals and campaign 2012 donors into becoming food Nazi’s, and now there are no more french fries for the little ones unless an adult asks for them. Yep, French Fries Now Need Parental Permission at the Olive Garden effective October 2011.
The company stock value continued to drop (the death spiral) and was down 12% last week….. and getting worse – the problems are embedded.
Here is the follow-up today, 8 months later: ORLANDO, Fla. (AP) - Darden Restaurants (DRI), struggling to draw more customers into its Olive Garden and Red Lobster restaurants, said Friday that its third-quarter profit could fall below Wall Street’s expectations and cut its outlook for the year.
The Orlando, Fla.-based chain has tried to revamp menus and marketing for its flagship chains. But revenue at Olive Garden, Red Lobster and LongHorn Steakhouse locations open at least one year is expected to fall 4.5 percent in the quarter ending Feb. 24, indicating those efforts have yet to pay off.
The company’s priority is re-establishing customer traffic momentum at the three restaurant chains, said CEO Clarence Otis in a statement. “We recognize there is still more to do to further address affordability and to improve other important aspects of the guest experiences we provide.”
Otis said the first half of the fiscal third quarter was “encouraging,” but higher payroll taxes and rising gas prices, along with severe winter weather, sent sales sliding in February.
Darden Restaurants Inc. said net income from continuing operations in December-February period will be $1 to $1.02 per share, below analyst expectations of $1.12 per share, according to FactSet.
Darden, like other restaurant chains, has been dealing with tougher competition due to the growing popularity of chains such as Chipotle Mexican Grill and Panera Bread. They offer food that’s a step up from fast food but not as expensive as a sit-down restaurant.
To combat this, at Olive Garden, the company rolled out an updated advertising campaign and introduced more light and affordable dishes. At Red Lobster, it added options for people who don’t like seafood.
But so far these changes have not sparked a turnaround. In January Darden replaced the president of Olive Garden in an effort to improve results. [...]
For the third quarter, Darden expects revenue in restaurants open at least one year, a key retail metric, to drop 4 percent at Olive Garden, 7 percent at Red Lobster and 1.5 percent at LongHorn Steakhouse. For its division of smaller restaurant chains, it expects the measure to rise 2 percent.
For the fiscal year ending in May, Darden predicted revenue in restaurants open at least one year to rise 6 to 7 percent across its chains. The figure is expected to fall 1.5 to 2.5 percent for its division containing the Red Lobster, Olive Garden and LongHorn Steakhouse chains.
The company cut its outlook for 2013 earnings from continuing operations to $3.06 to $3.22 per share, from a December prediction of $3.29 to $3.49 per share. Analysts expected $3.38 per share. (read more)