NEW YORK (AP) — Problems with avoiding the effects of the Patient Protection and Affordable Care Act (PPACA) have contributed to earning forecast cuts at the parent company of Olive Garden and Red Lobster.
The company, Darden Restaurants Inc., said it has cut the forecasts partly because of marketing challenges and partly because it was hit by a publicity backlash from tests intended to gauge how it could limit costs for workers’ health care.
Starting in 2014, big employers such as Darden will be required to provide health insurance to full-time workers. The company had tested hiring more part-time workers and replacing full-time workers who left with part-time workers in select markets to gauge how it could mitigate those costs.
Clarence Otis, the Darden chief executive officer, said the media coverage was a “secondary issue” that hurt the quarterly results.
He said coverage of the test “misinterpreted our actions against a stand against health care reform.” The company has since said it will not move any full-time workers to part-time status as a result of the regulations.
With the topic set to remain an issue the coming year, he said it could continue to be a factor on the company’s results.
The remarks came in a conference call with analysts to discuss Darden’s fiscal second-quarter results, which showed a 37 percent drop in net income. For the three months ended Nov. 25, the company said it earned $33.6 million, or 26 cents per share. That’s compared with $53.7 million, or 40 cents per share, a year ago.