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Olive Garden owner shifts course to focus on deals

Published on NewsOK Modified: December 20, 2012 at 7:23 pm •  Published: December 20, 2012
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At Olive Garden, executives noted that a "Dinner Today, Dinner Tomorrow" promotion didn't clearly communicate the nature of the deal, which gave customers who ate at the restaurant a free second meal to take home.

At its specialty restaurant group, which includes smaller chains such as The Capital Grille and Bahama Breeze, the figure rose 0.7 percent. When including results from newly opened restaurants, Darden said total revenue for the quarter climbed 7 percent to $1.96 billion for the period, meeting Wall Street's forecast.

In cutting its forecast for the year earlier on Dec. 4, Darden also said that it was hit by a publicity backlash from tests intended to gauge how it could limit costs for workers' health care. Starting in 2014, big employers such as Darden will be required to provide health insurance to full-time workers. The company had tested hiring more part-time workers and replacing full-time workers who left with part-time workers in select markets to gauge how it could mitigate those costs.

Darden CEO Clarence Otis said the media coverage was a "secondary issue" that hurt the quarterly results. He said the coverage "misinterpreted our actions as a stand against health care reform." The company has since said it will not move any full-time workers to part-time status as a result of the regulations.

With the topic set to remain an issue the coming year, he said it could continue to be a factor on the company's results.

Darden has about 2,000 locations in North America; roughly 1,500 of them are Olive Garden and Red Lobster restaurants. The company plans to scale back slightly on new openings, with about 95 new locations planned for the year, down from 100 to 110. The figures do not reflect locations for Yard House, one of the company's smaller chains.

The company's shares fell $1.34, or 2.9 percent, to close at $45.47 Thursday.

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Follow Candice Choi at www.twitter.com/candicechoi