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One has to wonder if Olive Garden parent Darden Restaurants (DRI) will ever get it right. The meandering casual-dining giant announced on Thursday that it’s delaying its upcoming annual shareholder meeting. The event is being bumped from the end of September to Oct. 10.

Delaying a meeting by 10 days isn’t the end of the world. Darden has clearly been through worse. However, we can’t ignore that the reason for the delay is that it has been having difficulties getting its proxy statement materials finalized and approved by the Securities and Exchange Commission. Activist investors have been rattling the cages at Darden, and that’s apparently making it harder than usual to get the required materials out to shareholders on time.

Turning to Starboard

It’s been two years since I argued that Olive Garden and Red Lobster — Darden’s two flagship eateries at the time — would never be great again. There’s no reason to back off that brazen statement now.

Both concepts have been posting declining comparable-restaurant sales for several quarters, and Darden unloaded Red Lobster this summer at a price that was apparently too low for some activist investors.

Longtime CEO Clarence Otis also announced this summer that he would be retiring later this year, a move that Starboard Value — the activist investor that has an 8 percent stake in the company and that has been the most vocal about its displeasure with Darden’s performance — claims was long overdue.

Starboard has been hard to please. Despite the resignation of Otis and the agreement to nominate just nine candidates to its dozen-member board — opening up the board for Starboard nominees — the activist investor wants more. It doesn’t want Darden filling up the majority of the seats, even if they are independent board members. In short, this annual shareholder meeting is delayed because the war is far from over.

Spotlight on Olive Garden

With Red Lobster bowing out, it will be up to Olive Garden to carry the weight at Darden Restaurants. Darden also runs several smaller and potentially promising concepts, including Seasons 52, LongHorn Steakhouse and Yard House, but Olive Garden accounted for 57 percent of the revenue from continuing operations in Darden’s latest quarter.

The spotlight shining on Olive Garden is starting to feel more like a heat lamp. Darden closed out it fiscal 2014 year with negative comparable-restaurant sales at Olive Garden for all four quarters. We’ll soon find out how things played out for Olive Garden during the fiscal first quarter of 2015. Darden reports on Sept. 12, and analysts are bracing for a sharp drop in profitability.

Why have patrons turned on Olive Garden? Is it the quality of the food, the perceived value of the meals or service concerns? There are plenty of casual-dining operators smarting these days, but there are also plenty of market leaders that are doing just fine in growing their store-level traffic and sales.

A Wilting Garden?

Darden’s trying to please its investors. It is taking chunks of the $2.1 billion that it sold Red Lobster for earlier this year to pay down debt and buy back shares. It’s also standing firm on its quarterly dividend that adds up to $2.20 a share over the course of an entire year.

Analysts see Darden earning just $2.23 a share this year, and given the way that the company has missed Wall Street’s profit targets in three of the past four quarters, one has to wonder if it will earn enough to cover its payouts.

More important, the activist distractions and Darden’s emphasis on returning money to its shareholders may limit what it can do to make Olive Garden popular again. It’s clear that recent menu tweaks that have included new premium salad toppings, an actual hamburger and happy hour pricing on select appetizers aren’t enough. Olive Garden is still going in the wrong direction, and the longer it backpedals, the farther it will be from where it used to be when it was a concept that rocked.

Motley Fool contributor Rick Munarriz and the Motley Fool have no position in any of the stocks mentioned. Try any of our newsletter services free for 30 days.

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