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Darden Restaurants, Inc. (DRI)

  • Jan. 2, 2014, 3:06 PM
    • The National Restaurant Association's Restaurant Performance Index rose 0.2% M/M in November to hit a five-month of 101.2
    • The research group also reported that 47% of restaurant operators saw customer traffic growth improve in November from the same period a year ago, up from the 43% which reported improvement in October.
    • A majority of restaurant operators have a positive outlook on the industry and plan to spend money on capital expenditures in the next few months.
    | 1 Comment
  • Dec. 27, 2013, 1:20 PM
    • Hedgeye's Howard Penney doesn't think a stand-alone Red Lobster will offer much upside for Darden Restaurant (DRI -0.2%) shareholders.
    • The research analyst thinks a spinoff will create angst for Red Lobster employees and set up the new restaurant company for an accelerated decline.
    | 1 Comment
  • Dec. 23, 2013, 9:28 AM
    • Shares of Darden Restaurants (DRI) are higher in early trading after Starboard discloses a 5.6% stake.
    • Reaction: Restaurant industry analysts for the most part agree with the direction activist investors are taking in pushing Darden to do more than just spin off Red Lobster. The buzz from the company's headquarters in Orlando isn't that optimistic. Employees are reportedly "devastated" with the restaurant operator's direction and see a major brain drain as a very realistic possibility.
    • DRI +2.6% premarket to $52.40.
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  • Dec. 23, 2013, 2:11 AM
    • Activist investor Starboard Value has reportedly bought a 5.6% holding in Darden Restaurants (DRI) just days after the latter said it intends to spin off its Red Lobster operations following pressure to restructure from another shareholder, Barington Capital Group.
    • However, Darden's plan is not enough for Starboard, which wants the restaurant operator to create a real estate investment trust (REIT) for its property holdings, and combine its Red Lobster, Olive Garden and LongHorn Steakhouse chains into one company, and its faster-growing businesses into another.
    • Starboard hasn't been in contact with Barington, whose wish list is similar but not identical to Starboard's, although it has spoken with other disgruntled shareholders.
    | 1 Comment
  • Dec. 19, 2013, 11:59 AM
    • S&P places Darden Restaurants (DRI -4.4%) on Creditwatch after the company's plan to separate out Red Lobster brings some unknown implications into the credit equation.
    • The ratings agency says it will update its stance after evaluating the final Red Lobster transaction.
    | 1 Comment
  • Dec. 19, 2013, 9:21 AM
    • Shares of Darden Restaurants (DRI) are putting in a volatile premarket session as investors digest lackluster same-restaurant sales, weak guidance, and the planned separation of Red Lobster from the mother ship.
    • The quick analyst reaction to the move by the company to shed Red Lobster in order to "enhance" shareholder value leans to the skeptical side: 1) The action comes late and could only draw mild P-E interest. 2) The new DRI will be 60% Olive Garden - a chain which still needs a lot of work to be done on it to reverse momentum. The question is how? Capex spending is being cut with management tied to a healthy dividend payout.
    | 1 Comment
  • Dec. 19, 2013, 7:59 AM
    • Darden Restaurants (DRI) says it plans to separate its Red Lobster business from the company either through a sale or spinoff.
    • The Red Lobster chain has seen some of the weakest traffic trends in the sector during Q4 and faces tough seafood input costs.
    • DRI +0.1% premarket.
    | 1 Comment
  • Dec. 19, 2013, 7:35 AM
    • Darden Restaurants, Inc. (DRI) declares $0.55/share quarterly dividend, in line with prior.
    • Forward yield 4.16%
    • Payable Feb. 3; for shareholders of record Jan 10; ex-div Jan 8.
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  • Dec. 19, 2013, 7:32 AM
    • Darden Restaurants (DRI) reports a blended same-restaurant sales slip of 1.0% in FQ2 for its Olive Garden, Red Lobster, and Longhorn Steakhouse chains.
    • The company says a shift in the timing of Thanksgiving impacted same-restaurant sales favorably by 90 bps during the period.
    • Olive Garden was the best-performing brand as lower expenses helped it see profit increase compared to a year ago, while the other two chains saw profits worsen. (PR)
    • DRI -5.5% premarket
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  • Dec. 19, 2013, 7:09 AM
    • Darden Restaurants (DRI): FQ2 EPS of $0.20 in-line.
    • Revenue of $2.05B (+4.6% Y/Y) misses by $0.02B. (PR)
    | 1 Comment
  • Dec. 19, 2013, 12:05 AM
  • Dec. 18, 2013, 5:30 PM
  • Dec. 17, 2013, 9:33 AM
    • 2.8% shareholder Barington Capital escalates its activist posture towards Darden Restaurants (DRI +1.3%), issuing an 84-page presentation stating its belief that  Darden's "corporate centralization and resulting internal complexity have contributed to the Company's declining financial performance and eroding competitive position."
    • Barington believes $71-$80/share in value could be unlocked if the company is split into "Darden-Mature" (Olive Garden and Red Lobster) and "Darden Higher-Growth" (Bahama Breeze, Longhorne Steakhouse, Seasons 32, Eddie V's, Yard House, and The Capital Grille) and the real estate assets, which Barington believes are valued at $4B, are divested. The respective companies would then be run more in-line with value and growth companies respectively, Barington recommends. The points have been a general theme of Barington's agitation in the past several months.
    • And although Barington is encouraged by Darden's proposed $50M in cost cutting efforts, the fund thinks the restaurateur "has numerous actionable avenues to lower operating expenses by up to $100M-$150M."
    • Barington has hired a proxy solicitation firm and Houlihan Lokey to review its recommendations in a sign that the fund may be willing to go to bat to push through its recommendations.
  • Dec. 2, 2013, 2:14 PM
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  • Dec. 2, 2013, 1:25 PM
    • The Olive Garden restaurant chain will start selling six-ounce hamburgers after research showed it was losing customers to burger-selling rivals in the family dining category of the industry.
    • The Darden Restaurant (DRI -0.5%) property tested a few burger concepts earlier this year before coming up with the revelation that the burger needed a companion. Enter french fries to the Olive Garden menu.
    • What to watch: The burger play looks ill-fated to some analysts with the Olive Garden brand entrenched as an Italian food option.
  • Nov. 11, 2013, 9:56 AM
    • Darden Restaurants (DRI +0.2%) won't be making major changes to the company's operating structure, according to Hedgeye's Howard Penney.
    • Management appears to be resisting the calls from activist investors such as Barrington Capital Group for a breakup or spinoff of real estate properties.
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Company Description
Darden Restaurants Inc owns and operates dining restaurants. Some of its trade names are Red Lobster, Olive Garden, LongHorn Steakhouse, Bahama Breeze, Seasons 52, Eddie V's Prime Seafood, Wildfish Seafood Grille and Yard House.
Sector: Services
Industry: Restaurants
Country: United States