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Darden CEO to Step Down After Leading Olive Garden Parent Through Pandemic

Darden's market cap fell to more than $4 billion in March 2020. Since then it has quadrupled. The CEO is now turning over the reins to the COO.

Eugene "Gene" Lee Jr., who steered Olive Garden parent Darden Restaurants  (DRI) - Get Darden Restaurants, Inc. Report during the pandemic and oversaw a quadrupling of its market cap since then, is retiring as chief executive after seven years.

Lee, 60, is set to retire as CEO on May 29. The company said he'll be executive chairman until the 2022 annual meeting and then become non-executive chair. 

The owner of LongHorn Steakhouse, Capital Grille and Cheddar's Scratch Kitchen appointed President and Chief Operating Officer Ricardo Cardenas to succeed Lee as CEO from May 30. Cardenas will also join the board of the multi-restaurant operator.

"During Gene’s tenure, Darden’s revenues increased by more than $2 billion and market capitalization increased approximately threefold to nearly $20 billion," Charles Sonsteby, the board's lead independent director, said in a statement.

Darden's market capitalization went from more than $4 billion in March 2020, at the start of the pandemic, to more than $19 billion recently.

"During Gene’s tenure, Darden’s revenues increased by more than $2 billion and market capitalization increased approximately threefold to nearly $20 billion," the board's lead independent director, Charles Sonsteby, said in a statement.

"Gene has successfully led the company through significant change and unpredictability, most recently during the COVID-19 pandemic with an unwavering focus on our guests and our team members," Sonsteby added.

On March 18, Darden's stock price fell to $34.16 a share during the coronavirus pandemic. At the time, most restaurants in America had to shut down due to public-health restrictions enacted to control the spread of the coronavirus.

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During the pandemic, Darden streamlined its business with smaller menus and a pullback on marketing. It has also invested in technology and training to make its staff more productive.

Lee joined Darden in 2007 and has served as president and CEO since February 2015.

"It has been a privilege to serve as Darden’s CEO for the past seven years and to work with the most dedicated and talented team members and management team in the industry,” said Lee. 

“As chairman, I look forward to collaborating with Rick and our board to help Darden achieve even higher levels of success," Lee added.

When Lee took over as CEO of Darden in 2015 he had already introduced online ordering at Olive Garden, which led to a rise in its takeout business. He also added lower-calorie dishes to the menu and was credited with speeding up the lunch service, The Wall Street Journal earlier reported.

Darden also introduced an everyday-value menu under Lee's guidance.

Shares of Darden at last check dropped 5.3% to $139.37. 

For the second quarter ended Nov. 28, the Orlando, Fla., company reported net income more than doubled to $1.48 a share from 73 cents in the year-earlier quarter. Its second-quarter revenue rose 37% to $2.27 billion.