Olive Garden Sees Growth in Same Store Sales

Darden Restaurants Inc started to show progress in turning its ailing chain of Olive Garden restaurants around posting the first positive quarter on Tuesday for sales in same stores in over a year and beating expectations of analysts.

Eugene Lee the interim CEO told Darden investors that moving from the deep discounts to instituting an everyday value menu for $9.99 has helped to attract more customers to Olive Garden and to ordering online for carryout.

Shareholders of Darden in October cast their votes to replace the entire board of directors with a group of 12 directors that Starboard Value LP had nominated. Starboard, an activist investor had pressured the company to go through a restructure for nearly a full year.

Starboard not only pressured Darden to improve its sales at its Olive Garden restaurant, it had pushed to put its real estate into a company that was separate and traded publicly.

On Tuesday, during the call for the first earnings since the election of the new board, Lee said Darden was exploring its options for its portfolio of real estate.

The company has advisers to conduct a thorough review of the entire portfolio. The company announced as well that the board was actively engaged in a process of searching for its next CEO as well as planning an effort to cut costs, of which the details will be shared in the upcoming quarters.

Lee said that the board and management at Darden’s were working together very well and that the new board had brought about more positive company wide.

Lee noted that despite its improvements, Olive Garden has a long road ahead to return to what it was before.

For its fiscal second quarter through November 23, sales at its restaurants opened a minimum of 16 months were up 0.5%, which was the first increase for Olive Garden since the three month period that ended in May of 2013.

The increase beat expectations on Wall Street of a 0.4% drop. The casual dining Italian restaurant chain posted growth in sales of same stores for November, which marked the first time four consecutive months of increases in sales at same stores since November of 2010.

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