Is Olive Backyard Going Out of Enterprise?


In December 2020, a web based commercial displayed an image of an Olive Backyard Italian Restaurant signal together with textual content that learn: “Closing Time: Right here’s All The Restaurant Chains Closing in 2020.”

This commercial was deceptive. Olive Backyard just isn’t closing all of its eating places. Readers who clicked the commercial had been led to a 50-page story on the web site Cash Pop.

Whereas the commercial promised a listing of restaurant chains that may be closing in 2020, the headline on the precise story was completely different: “These Common Restaurant Chains Are Shedding Cash Quick.”

The story talked about Olive Backyard, but it surely solely talked about that two places had closed in Springfield, Massachusetts, and Birmingham, Alabama, in March and April, respectively.

Olive Backyard didn’t exit of enterprise in 2020, however that’s to not say it hadn’t confronted monetary hardship throughout the COVID-19 pandemic. The coronavirus had led to the closure of dine-in companies at hundreds of various eating places throughout the US. This meant much less income, which resulted in misplaced jobs. In lots of instances, eating places closed.

On June 22, 2020, Nation’s Restaurant Information reported that Nationwide Restaurant Affiliation President and CEO Tom Bené stated the restaurant trade had confronted “catastrophic losses.”

Darden Eating places owns the Olive Backyard model, in addition to LongHorn Steakhouse, Cheddar’s Scratch Kitchen, Yard Home, The Capital Grille, Seasons 52, Bahama Breeze, and Eddie V’s.

On Dec. 9, 2020, InvestorPlace.com reported that Darden had managed to outlive the pandemic up to now, but it surely additionally requested: “What’s subsequent for Darden Eating places?”

The bull case is constructed on a bear case concerning different eating places. With out authorities assist, small operators are closing by the rating. This implies chains like Darden could also be all that’s left when individuals once more really feel suitable for eating out.

Darden has managed to generate income at Olive Backyard whereas closing half its tables. It reinstated the dividend and paid again its $270 million emergency mortgage. As soon as the pandemic is over, Cramer predicts, fast-casual chains like Olive Backyard can be “the peak of positive eating.”

Darden is predicted to report earnings Dec. 18, for the quarter ending in November. The estimate is for 72 cents per share of web revenue on $1.7 billion of gross sales. That might beat final 12 months’s revenue on 17% much less income.

The Cash Pop story additionally talked about The Cheesecake Manufacturing unit on its listing. We beforehand lined that rumor as effectively.

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