Darden Restaurants cancels annual analyst meeting, opts instead to meet directly with shareholders and investors; announcement comes days after company announces plans for major changes to some of its brands
March 6, 2014
– Darden Restaurants cancels analyst meeting after announcing major changes to some brands
Darden Restaurants Inc. has canceled its annual analyst meeting, opting instead to meet directly with shareholders and investors.
The restaurant operator, which owns chains such as Red Lobster, Olive Garden, LongHorn Steakhouse and Bahama Breeze, confirmed the decision Wednesday. It comes only days after the company announced plans for major changes to some of its brands and amid ongoing pressure from activist investors.
The meeting with analysts had been scheduled for March 28 in New York.
Darden spokesman Rich Jeffers said that the company felt it would be "more productive" to meet with investors and shareholders directly rather than in a group meeting. He said that given the significance of the company's announcements earlier in the week, it wanted to provide time to answer questions in detail.
Darden said Monday said that it plans to hold on to and revamp its Olive Garden chain, while spinning off and selling only Red Lobster. The company also reported preliminary quarterly results that fell short of market expectations as sales continued to slide at its two flagship chains. Its stock fell sharply.
The company, which is based in Orlando, Fla., blamed rough winter weather but it has been battling weak sales trends for some time as consumers tastes have shifted.
Those sagging trends have drawn the attention of some activist investors, such as Barington Capital and Starboard Value LP, which have both argued for changes at the company.
Barington believes Olive Garden and Red Lobster should be separated as a pair from the company's smaller chains. It also wants the company to create a real estate investment trust to unlock its value, which Darden said Monday it has decided against.
Starboard said in December that the company could get a lot of value from its real estate holdings and should explore other options like selling or separating other businesses. The firm planned to make recommendations to the company on strategy, spending, financial performance, and board composition.
Representatives for both firms could not be reached late Wednesday for comment.
Darden's stock fell 68 cents to close at $47.94 Wednesday. They have lost 12 percent in the past year.
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