Increased sales at each Darden Restaurants Inc. concept led the casual-dining giant to post a 20-percent hike in profit in its first quarter.
The Orlando, Fla.-based company’s specialty restaurant group, which includes The Capital Grille, Seasons 52 and Bahama Breeze, booked a 12-percent jump in total revenue from increased same-store sales and new unit expansion.
Darden’s largest brands, Red Lobster, Olive Garden and LongHorn Steakhouse reported a blended same-store sales increase of 1.1 percent.
Net income for the quarter ended Aug. 29 totaled $113.3 million, or 80 cents per share, compared with $94.3 million, or 67 cents per share, in the same quarter last year. Total revenue increased 4.2 percent to $1.81 billion in the first quarter compared with $1.73 billion in the year-ago quarter.
Clarence Otis, chairman and chief executive of Darden, said in a statement that he was “encouraged by the continued improvement in industry sales trends.”
However, he added, “Though it's improving, the environment remains challenging.”
Domestic same-store sales rose 2.7 percent at Olive Garden and 2.2 percent at LongHorn Steakhouse, but fell 1.7 percent at Red Lobster.
Darden said its outlook for fiscal 2011 remains unchanged, with expected net earnings growth of between 14 percent and 17 percent per share. Blended same-store sales from Red Lobster, Olive Garden and LongHorn Steakhouse are expected to increase between 2 percent and 3 percent. The company also said it would add 70 to 75 net new units.
Darden reported division results:
• Olive Garden: First-quarter sales of $877 million were 6.8-percent higher than the same quarter a year ago, driven by revenue from 32 net new restaurants. On Aug. 29, Olive Garden had 721 units in the United States and six in Canada for a total of 727.
• Red Lobster: First-quarter sales of $600 million were 0.8-percent lower than last year, driven by a U.S. same-restaurant sales decrease of 1.7 percent. The division added four net new restaurants. Red Lobster has 666 units in the United States and 28 in Canada for a total 694.
• LongHorn Steakhouse: First-quarter sales of $226 million were up 6.8-percent over the year-ago period, driven by revenue from 12 net new restaurants. LongHorn has 334 units, all in the United States.
• Specialty Restaurant Group: The division’s first-quarter sales of $107 million were 11.7 percent higher than in the same quarter last year. Same-store sales at the 41-unit Capital Grill increased 2.7 percent, with first-quarter sales rising 8.7 percent from last year, to $54 million, when it had 38 units. Same-store sales at the 11-unit Seasons 52 increased 5.8 percent, with first-quarter sales up 51 percent, to $16 million, with three more restaurants than last year. Same-store sales at the 25-unit Bahama Breeze slipped 0.1 percent, with sales up 4.4 percent, to $37 million, with one more restaurant than in last year’s quarter.
Darden at the end of the quarter operated 1,832 restaurants over all its brands.
Contact Ron Ruggless at [email protected].
