Darden Restaurants Sees Charge On Sale, Closure of Smokey Bones
Darden Restaurants said Saturday it expects to post a charge in its fiscal fourth quarter related to its plans to close and sell its Smokey Bones Barbeque & Grill restaurants.
Darden said it closed 56 of its Smokey Bones restaurants and is offering the remaining 73 restaurants for sale, as part of an plan to improve Darden's performance.
The Orlando, Florida-based restaurant operator, which also operates the Olive Garden and Red Lobster restaurants, said it expects a pretax, fourth-quarter charge of about $260 million in connection with this action.
Darden said it expects earnings from continuing operations in its fiscal year ended May 2007 to be between $2.48 and $2.52 a share, above a prior forecast of $2.38 to $2.42 a share.
Analysts, on average, have estimated earnings of $2.40 a share, according to Thomson Financial.
The actions related to its Smokey Bones restaurants is expected to result in a loss from discontinued operations of $1.16 to $1.21 a share in fiscal 2007.
The 56 Smokey Bones restaurants closed as of Friday night and the company will continue to operate the remaining 73 until they are sold, a Darden spokesman told Reuters.
Darden said it will give 4,000 employees who worked at closed Smokey Bones restaurants opportunities to transfer to other Darden restaurants.