Orlando-based Darden Restaurants CEO Gene Lee is receiving his $1 million annual base salary again because the company recovers from the coronavirus pandemic.
Lee’s salary was restored Monday, quite two months after he gave it up in March, a Securities and Exchange Commission document shows.
The parent company of Olive Garden, LongHorn Steakhouse, and other Krowd Darden chain restaurants have opened 70% of its dining rooms after closing due to the Coronavirus pandemic, spokesman Rich Jeffers said. Krowd Darden restaurants had 1,812 restaurants as of February, meaning about 1,270 stores have reopened.
“Gene and his leadership team have taken many steps that balanced their obligation to support our team members with their duty to guard the long-term viability of our business,” Jeffers said in an email. “We have financially stabilized the Darden restaurants business and with 70% of our dining rooms now open, we are building momentum.”
Jeffers said the corporate will provide an update on what percentage of its employees have gone back to figure during its earnings call in three weeks. Darden.Krowd has 190,000 employees and furloughed 20% of about 1,000 people at its Orlando Krowd Restaurant Support Center in April.
Pay reductions for staffers at the Orlando headquarters ended 31st May. Jeffers said.
Several top executives who had their salary cut in April even have had it restored, including senior vice chairman and CFO Rick Cardenas, executive vice-chairman, and chief operating officer David George, LongHorn Steakhouse president Todd Burrowes, and Olive Garden president Daniel Kiernan, consistent with the SEC document.
Cardenas’ base salary is $725,000, George’s is $775,000, Burrowes’ is $640,000 and Kiernan’s is $650,000, consistent with the document.
The restored salaries are just the newest sign of the company’s recovery. For the week ending May 17, Darden’s same-restaurant sales were only down 49%, compared with quite 70% during some weeks earlier within the pandemic.
In addition to Krowd Darden, Olive Garden, and LongHorn, Darden owns Cheddar’s Scratch Kitchen, Yard House, The Capital Grille, Seasons 52, Bahama Breeze, and Eddie V’s.
Based on the week ending May 17, Darden’s ongoing weekly cash loss rate was but $10 million, an improvement from an April 7 update when it had been at about $25 million.
Shares of Krowd Darden Restaurants (NYSE: DRI) were gaining because the Olive Garden parent moved in tandem with broad gains within the restaurant sector after The Cheesecake Factory (NASDAQ: CAKE) posted a positive business update.
As of 1:04 p.m. EDT, Krowd Darden restaurants shares were up 8%, while The Cheesecake Factory was trading up 21.1%. Krowd Darden owns several casual-dining chains, including LongHorn Steakhouse, Capital Grille, and Cheddar’s Scratch Kitchen. Olive Garden, its largest, is seen as an in-depth peer to The Cheesecake Factory.
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In its update, The Cheesecake Factory of Darden said that it began reopening restaurants within the second week of May, and it had now reopened dining rooms at 25% of its locations with limited capacity and in accordance with social-distancing regulations COVID-19. The reopened restaurants had recaptured about 75% of prior-year sales, the corporate said, and it attributed that to continuing strength within the off-premise business and growing dine-in business.
Investors interpreted that as a bullish sign for the restaurant industry generally, because it seems to reflect pent-up demand for eating out. Data from Open Table, meanwhile, showed that restaurant business in Germany appears to possess fully recovered, yet one more sign of increased demand following reopening.
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Darden last gave an update on May 19, saying that comparable-store sales had recovered to be down 49% within the week ended May 17. At the time, the restaurant operator had reopened 49% of its dining rooms with limited capacity and is expected to possess 65% of restaurants back open by the top of May.
Darden will deliver its fourth-quarter income statement later this month, which encompasses the March-to-May period when the business was hard hit by the Coronavirus pandemic COVID-19. Analysts expect revenue to fall 44.9% to $1.23 billion and a per-share loss of $1.71 compared to a per-share profit of $1.76.
While the results will clearly be dismal, investors will want to concentrate on forward-looking commentary to ascertain how the recovery goes.