Darden Restaurants reported a $32.8 million quarterly loss Tuesday, the first results since activist investor Starboard Value took over the company’s board of directors.
Darden said it lost money despite 0.5 percent growth in same-restaurant sales at Olive Garden and 2.6 percent at Longhorn Steakhouse. However, traffic continued to drop at both Olive Garden and Longhorn.
Quarterly losses mounted from costs associated with the takeover, the Orlando-based company said.
Sales for the quarter increased by 4.9 percent to $1.56 billion.
The company’s results, minus one-time costs, of 28 cents per share beat analysts’ estimates of 27 cents.
The earnings come just two months after Starboard Value and CEO Jeff Smith convinced Darden’s shareholders to vote in an entirely new slate of directors to run the company. It followed years of declining same-restaurant sales at Olive Garden and the controversial $2.1 billion sale of Red Lobster to investment firm Golden Gate Capital.
Darden is Orlando’s only Fortune 500 company and the parent of Olive Garden, Longhorn Steakhouse, Bahama Breeze, Seasons 52, The Capital Grille, Eddie V’s and Yard House.
Smith is now Darden’s chairman, and the new board promoted Chief Operating Officer Gene Lee to interim CEO to replace Clarence Otis. He announced his retirement shortly after the sale of Red Lobster was completed. Darden is officially still looking for a permanent CEO.
Darden’s stock has gained about 18 percent since Oct. 10. Starboard has promised bigger returns in an aggressive 100-day turnaround outlined in September.