On Friday, Darden Restaurants, Inc. reported profit that was better than expected for its first quarter fiscal earnings. This came just prior to the company’s revamping of the menus for both the Red Lobster and Olive Garden chains, which are both struggling. A quarterly dividend was also declared by Darden, which sent shares of the stock up by over 5%, briefly hitting an all time high for the stock.
The biggest chain at the company, Olive Garden, has struggled and Darden is attempting to increase traffic by focusing its menu on value and adding a number of lighter options to its menu. The COO of the company, Drew Madsen, said smaller portion sizes for plates was due to the number of people who had ordered appetizers for their meal.
Major changes are in order said Madsen and they will address the large sized appetizers substituting for small plates. The trend of customers in ordering smaller dishes might also reflect price sensitivity during the tough economic climate in the U.S. Because of that, the chain will maintain price increases of less than 2% for the upcoming year.
Although the company has already started the process of redoing its marketing and menu, traffic at Olive Garden restaurants that were over 13 months old, declined during the quarter. The company said the dip in customers was due partly because of the Taste of Tuscany promotion that did not take hold during the beginning of the most recent quarter.
Darden is based in Orlando, Florida and has over 2,000 restaurants it owns and operates.
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