Darden Restaurants was hit hard by the omicron variant of the coronavirus pandemic in January, with more than 13,000 employees missing work that month, company leaders revealed Thursday.
The owner of Olive Garden and other chain restaurants in January saw employees unable to work at a level three times greater than the monthly peak it experienced during the earlier delta variant, said chief operating officer Rick Cardenas. Darden has about 175,000 employees.
Some restaurants were down as much as 40% of their staff and others needed to limit hours or only offer takeout temporarily, Cardenas said.
“The dramatic spike in cases created the most difficult operating environment since the initial onset of COVID two years ago,” CEO Gene Lee said.
The effects of omicron were discussed during a Thursday morning earnings call, where Darden reported total sales of $2.45 billion for its third quarter ending Feb. 27, up 41.3% compared with the same time last year. Same-restaurant sales were up 38.1%.
Lee said the company achieved record sales in December before the effects of omicron and bad weather took a toll on staffing and sales in January. The variant also increased expenses as the company had to pay more sick time and overtime because of its workforce shortages.
“Our third quarter was one of stark contrast,” Lee said. “I’m pleased with our performance in this highly volatile environment. Our team did a great job controlling what they could control.”
Darden launched its paid sick leave policy for hourly employees in March 2020 as the pandemic emerged in the United States.
Other restaurants and chains around Orlando also had to temporarily close locations or cut back hours with the omicron surge as workers got sick.
Omicron also caused more supply chain disruptions that Darden expects will lead to higher inflation in the new quarter.
The company raised prices 3.7% in the third quarter to deal with those effects. Pricing is still not keeping up with the total inflation Darden is experiencing, according to spokesman Rich Jeffers.
As COVID cases declined and things normalized, sales improved in February for Darden and the company saw “strong results that exceeded our internal expectations,” Lee said. That sales strength continued into March.
“Quarter-to-date, our average weekly sales are slightly ahead of our February actuals,” Lee said.
Darden has 1,855 restaurants including Olive Garden, LongHorn Steakhouse, Cheddar’s Scratch Kitchen, Yard House, The Capital Grille, Seasons 52, Bahama Breeze and Eddie V’s.
Darden’s stock was up about 2.5% Thursday afternoon to $134.19 following the earnings call.
This was the last earnings call for Lee as CEO, who will be retiring from the role in May. Cardenas is slated to take the helm.
