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Darden's profit plunges 35 pct.

Friday, Jun 20, 2014 - 00:57

June 20 - Falling sales and rising costs at Olive Garden and Red Lobster ate into Darden's quarterly profit as cheaper chains like Chipotle steal more customers. Fred Katayama reports.

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Investors and diners - having less of an appetite for Olive Garden and Red Lobster. Falling sales and rising costs at the troubled chains helped drag down Darden's quarterly profit 35 percent. Cheaper chains selling fast-casual food like Chipotle keep stealing its customers. Strong same-store sales at Darden's pricier restaurants like Capital Grille and Bahama Breeze weren't enough to offset that. All this comes amid a fight over Red Lobster and Darden's plans to revive the company. Darden said it expects to net $1.6 billion from its sale of Red Lobster, which will go towards paying debt and buying back shares. Activist investors objected to that sale. They seek a broader breakup of the company, separating its chains by size and creating a separate unit for its real estate. Darden has rejected their push for a new board. Darden's stock fell at the start of trade, adding to its 10 percent loss this year.

Darden's profit plunges 35 pct.

Friday, Jun 20, 2014 - 00:57

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