NEW YORK — Darden can’t seem to persuade more people to sit down for a meal at its Olive Garden and Red Lobster restaurants.
The company reported a sharply lower quarterly profit on Friday that missed Wall Street expectations, with sales down at its two biggest chains despite ongoing attempts to revamp their menus with lighter, cheaper options. Darden said it would slash costs to prepare for future challenges, in part by reducing its workforce.
It also said that its president and chief operating officer, Drew Madsen, was retiring and would be succeeded by Gene Lee, effective immediately. Lee headed Darden’s specialty restaurants such as The Capital Grille and Bahama Breeze, which had fared relatively better than the company’s flagship chains. Darden has been trying to win back diners with promotions intended to underscore the affordability of its food.
Olive Garden rolled out “small plates” that can work as appetizers or side dishes. Recent promotions included two dinners for $25 and its long-running Never-Ending Pasta deal.
Sales fell 4 percent at Olive Garden restaurants open at least a year in the latest quarter. The figure was down 5.2 percent at Red Lobster, where the company added more non-seafood options to attract a broader audience.
To cut spending by about $50 million a year, the company will cut its workforce by between 80 to 85 positions, as well as making program cuts. A representative said the personnel cuts will not be at the restaurant level.