ORLANDO Fla. Darden Restaurants Inc. upped its full-year earnings guidance on Tuesday as its sales and traffic trends showed improvements during the company’s February-ended third quarter.
Darden said it now expects fiscal 2010 earnings from continuing operations to increase between 5 percent and 8 percent from a year earlier, when it posted earnings of $2.65 per share. Darden’s prior outlook, released in December, called for earnings to be flat from the year earlier, or rise as much as 4 percent.
The Orlando-based company, which operates about 1,790 restaurants under the Olive Garden, Red Lobster, LongHorn Steakhouse, Bahama Breeze, The Capital Grille and Seasons 52 chains, has a May-ending fiscal year.
“The signs of sales and traffic improvement we began to see late in the second quarter and discussed during our December conference call with investors continued into January and February,” Clarence Otis, chairman and chief executive of Darden, said in a statement.
The company said its full-year earnings outlook is based on its expectation that combined U.S. same-store sales for Red Lobster, Olive Garden and LongHorn Steakhouse will decline about 3 percent, and that Darden will have opened between 50 and 55 net new restaurants.
Same-store sales for Darden’s third quarter increased between 1 percent and 1.5 percent at Olive Garden and between 0.5 percent and 1 percent at LongHorn. Same-store sales fell between 1 percent and 1.5 percent at Red Lobster and between 2.5 percent and 3 percent at The Capital Grille. A calendar shift for Thanksgiving, which was included in Darden’s second quarter last year, boosted blended same-store sales results by about 0.8 percent, the company said.
Third-quarter earnings per share from continuing operations are expected to total between 91 cents and 93 cents.
The company expects to release its full third quarter earnings on March 23.
Contact Sarah E. Lockyer at [email protected].
