Red Lobster is making money again, key investor says

by Samuel Pordengerg May 22, 2023 News
Red Lobster is making money again, key investor says

Red Lobster made a profit in the first quarter of this year, and the company doesn't plan to sell the brand.

Red Lobster's share of profit from operations improved from a loss in the same period last year according to a report from a Thailand-based seafood supplier.

On a May 3 earnings call, the CFO of the Thai Union group said he wanted to manage expectations. We still have a long way to go.

Thai Union's share in Red Lobster is still projected to be unprofitable. After just eight months on the job, the CEO of the chain resigned.

Red Lobster will not be sold in the short term, according to the company.

Thai Union, whose brands include Chicken of the Sea, became a Red Lobster stakeholder in 2016 before teaming up with a group of investors to acquire the rest of the company.

John Gordon said that it was notable that Thai Union didn't plan to sell the seafood chain.

It is important to the brand and the employees. Safety and continuity are important to the people because they don't have a CEO.

Part of Red Lobster's credit, no more than $65 million, was guaranteed by the Thai Union last year.

In the first quarter of this year, Thai Union's share of profit from Red Lobster was converted from Thai currency to US dollars. They lost about $7.2 million in the first quarter of 2022, which has now been converted to $7.2 million.

There is no question that this is a big change in the first quarter. Red Lobster will need tactical marketing promotions and store-level operational excellence in order to remain stable.

The first quarter was profitable because of the limited time event that started in January with menu items such as lobster and shrimp taco and lobster and shrimp top sirloin. The restaurant chain's prices have gone up as well.

Consumers in the US are sensitive to price, so Red Lobster needs to make sure it has good value between big promotions.

We have to change. The team is trying to come up with a new menu that is attractive from a value point of view.

Eating out cost more in April than it did a year earlier, with full-service meals costing more.

There are no updates on the search for a new CEO, despite the fact that Red Lobster has not had a profitable year.

Red Lobster said that Paul Kenny, the former CEO of Asia's Minor Food, would be a liaison between the leadership and the board. Kenny is a shareholder in the investor group that bought the chain.

Kevin Stockslager is an executive vice president and partner at Wray Executive Search. He is not involved in Red Lobster's hunt.

It is possible that they did not find the right candidate for the CEO position, but it is also possible that they are happy with some of the other current C-level leaders on their team.

Finding a new leader is important.

Red Lobster needs a world-class CEO to execute a revolutionary plan.

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