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Darden Restaurants, Inc.
today commented on the operational plan proposed by Starboard Value L.P.
and its affiliates ("Starboard").
"We remain open minded toward all ideas that support long-term value creation
for our shareholders and improve the dining experience for our guests," said
Gene Lee, President and Chief Operating Officer of Darden. "While we will
carefully and thoughtfully review Starboard's plan, which has been promised by
Starboard for some time, upon initial review, we believe many of the brand and
cost optimization strategies are already being implemented across our company
and are showing results."
Mr. Lee continued, "The Olive Garden Brand Renaissance is well underway, and
the improvements we are seeing in guest satisfaction and traffic trends
reinforce our confidence in Olive Garden's potential. In addition, our
efforts to grow and develop LongHorn Steakhouse and our Specialty Restaurants
are on track. As we evaluate the Starboard plan, we will work to continue
making strong progress across our brands for the benefit of all Darden
stakeholders, including our employees."
Olive Garden® Brand Renaissance First Quarter Fiscal 2015 Highlights
Over the past year, Darden has been implementing far-reaching improvements for
all elements of the Olive Garden business to reignite traffic growth and
support margin expansion. Key initiatives have included enhancing culinary
operations and service, introducing a core menu innovation, pursuing a new
approach to advertising and promotions, and launching a re-imaging program.
The Olive Garden Brand Renaissance is beginning to deliver positive results
and reinforces the Company's confidence in the brand's ongoing development.
o Guest experience and satisfaction scores are improving across the system,
including Overall, Attentiveness, Pace of Meal and Food Taste, as a result
of an intensified focus on service and food quality. Darden expects these
to translate into higher traffic trends over time.
o Online ordering, including a redesigned web experience and the national
launch of an online To-Go platform, is underway and strengthening the
take-out business. In the first quarter of fiscal 2015, Darden achieved a
13% increase in Olive Garden's take-out business compared to the first
quarter last year. Notably, check averages from online orders are
significantly higher than those placed on the phone, which represents a
margin growth driver should these trends continue.
o Testing of tablet technology in several restaurants is underway and has
generated encouraging results, including check growth due to an increase
in add-on sales, increased table turns, a 60% pay-at-the-table rate and
increased guest survey response rates, as well as an increase in tip
percentage for servers.
o Initial sales results from a pilot remodel program are encouraging. The
Company has completed three remodels that reflect significant interior and
exterior changes. This has resulted in a more than 10% increase in traffic
on average in the remodeled restaurants as guests respond enthusiastically
to the changes.
Darden Board Recommends Shareholders Vote on BLUE Card
Darden recommends that shareholders vote ONLY on the BLUE proxy card "FOR ALL"
of Darden's highly qualified, experienced and independent director nominees:
Michael W. Barnes, Gregory L. Burns, Jeffrey H. Fox, Christopher J. Fraleigh,
Stephen Odland, Michael D. Rose, Maria A. Sastre and Enrique Silva.
Shareholders may vote by mail, phone or internet following the instructions on
the BLUE proxy card.
CAUTION: Any vote on the white card is a vote for Starboard's control slate as
it could revoke any previous proxy you submitted using the BLUE proxy card.
Only your latest‐dated proxy counts. We urge shareholders – DO NOT SIGN OR
RETURN ANY WHITE CARD. SIMPLY DISCARD IT.
Innisfree M&A Incorporated is serving as the Company's proxy solicitor and can
be contacted toll-free at (877) 825-8631.
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