General Mills Inc. said today it will close 31 of its 1,075 restaurants, including seven in Toronto, as part of a restructuring to improve profits.
No restaurants in New York state will be closed.
The move is being made to help offset higher costs expected when new federal tax and health care policies take effect, said Chairman Bruce Atwater.
Fifteen of the restaurants to be closed, including 13 Red Lobsters and two Olive Garden restaurants, are in economically depressed locations in Canada, he said.
The U.S. closings are primarily in areas with more than one General Mills restaurant. General Mills also owns the China Coast restaurant chain.
Four Olive Gardens are being closed in the restructuring, two in Canada and two in the U.S. "The company believes elimination of (these) units will lead to material improvement in overall profitability and investment return in the remaining restaurants," General Mills said.
The company also plans to improve efficiency at some consumer foods manufacturing facilities by moving more quickly to high-performance work systems, Atwater said.
General Mills will take a restructuring charge of $45 million to $50 million, or 28 cents to 30 cents per share, in its fourth quarter ending May 31, he said. It earned $103.1 million in the fourth quarter a year ago.
"General Mills' overall financial results, including unusual items, will represent another year of record sales, earnings and earnings per share," Atwater said.