Shares of Darden Restaurants (DRI) tumbled almost 4% in Friday morning trading after the company announced weak quarterly results and a major management change.
Gene Lee, the president of the company’s specialty restaurant unit, is replacing formed COO and President Drew Madson, who is retiring. Lee will assume take the company’s reins immediately. Madson, who became COO in 2004, will help guide the transition, the Associated Press.
Darden, which owned the popular Red Lobster and Olive Garden chains, also announced a fiscal first-quarter profit of $70.2 million, down from $110.8 million during the same time last year. EPS came in at 53 cents, which badly missed the 70 cents that Wall Street had anticipated.
Sales at its Olive Garden restaurants dropped 4% during the quarter, while Red Lobster locations reported a 5.2% sales decline. Overall sales climbed to $2.16 billion, but that also missed the $2.19 billion that analysts were expecting.
The company is looking to cut costs by $50 million.
Red Lobster has come under pressure from skyrocketing shrimp prices in recent months after a disease slashed shrimp output in Asia.