Smith resigns as Darden chairman
Jeffrey Smith, who became board chairman of Darden Restaurants after his hedge fund replaced all the directors with a slate of its own, has resigned, the company said Tuesday.
Smith, CEO of Starboard Value and Darden’s chairman of the board since October 2014, stepped down as of Monday.
His replacement will be Charles Sonsteby, a board member who is chief administrative officer and chief financial officer of The Michaels Companies.
“It is with mixed emotion that I leave the board of directors,” Smith said in a statement. “I will thoroughly miss working with the capable and talented people throughout the company, and I am so incredibly proud of what we have been able to accomplish together.”
The news came on a day that Darden reported a robust performance in its third quarter.
It beat analysts’ expectations, with earnings of $1.21 per share vs. the consensus of $1.20, and revenues came in at $1.85 billion, vs. expectations of $1.84 billion, according to Zacks.
Darden, which owns and manages more than 1,500 restaurants, saw sales rise 6.7% to $1.85 billion and same-restaurant sales spike 6.2%. Olive Garden — with a 6.8% sales rise — and Bahama Breeze — with an increase of 9.9% — had the strongest performance among the company’s seven chains.
Smith took the helm of Darden’s board less than two years ago, when his hedge fund succeeded in replacing the restaurant company’s dozen directors with its own nominees.
The hedge fund complained that company management had made numerous mistakes, from bungling the sale of Red Lobster to allowing Olive Garden to put too many bread sticks on customers’ tables.
Darden’s shares were down 3.36%, to $65.08 in early afternoon trading Tuesday.