This is a securities fraud class action lawsuit against Darden Restaurants Inc. and certain officers and directors alleging violations of the Securities Exchange Act of 1934.
Darden, through its subsidiaries, engages in the ownership and operation of casual dining restaurants in the United States and Canada. Darden operates restaurants under the names Red Lobster, Olive Garden, Bahama Breeze, Smokey Bones, and Seasons 52.
The securities class action lawsuit alleges that Darden Restaurants issued materially false and misleading statements that misrepresented and failed to disclose:
(a) that Darden's core restaurants, such as Olive Garden, Red Lobster and LongHorn, were underperforming and same-store sales were experiencing negative trends;
(b) that Darden was experiencing rising food costs which were above internal expectations; and
(c) that, as a result of the forgoing, the defendants had no reasonable basis for their positive statements about Darden's prospects and guidance for fiscal 2008.
On December 18, 2007, Darden announced its financial results for the fiscal second quarter of 2008, the period ended November 25, 2007. For the quarter, Darden reported net earnings from continuing operations of $44.1 million, or $0.30 per diluted share, and sales of $1.52 billion. Moreover, Darden dramatically reduced its diluted net earnings per share growth for fiscal 2008 from 10-12% to 7-9%.
Upon this news, shares of Darden's stock fell $7.68 per share, or over 21%, to close at $28.39 per share, on extremely heavy trading volume.
Name (Stock Symbol)
Darden Restaurants, Inc. (DRI)
Darden Restaurants, Inc. owns and operates a large number of restaurant chains, including Red Lobster, Olive Garden, LongHorn Steakhouse, The Capital Grille, Bahama Breeze and Seasons 52.
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