Darden Restaurants Inc.’s seven brands continued to outperform the casual-dining segment in the third quarter ended Feb. 26, the company said Monday, as its Olive Garden chain continued to generate sales.
Same-store sales at 800-unit Olive Garden increased 1.4 percent in the period, the 10th straight quarter of growth for the Italian concept.
It also outperformed industry benchmarks without Darden’s concepts by 560 basis points in the quarter.
Darden said it is focusing on improving food and service, which has generated the best customer satisfaction scores in the brand’s history.
“We are focused on operational excellence,” CEO Gene Lee said during the company’s earnings call Tuesday, one day after Darden announced its acquisition of Cheddar’s Scratch Kitchen.
But to-go orders help, too. To-go orders at Olive Garden increased 17 percent in the quarter, and have grown 60 percent on a three-year basis.
Meanwhile, LongHorn Steakhouse’s same-store sales grew 0.2 percent, the 16th straight quarter of growth for the chain.
“The consumer is pretty steady,” Lee said, discussing overall consumer demand. “We know the consumer is looking for everyday value. When you give the consumer what they want, they’re visiting restaurants.”
Overall, Olive Garden’s revenue increased 1.7 percent in the quarter, to nearly $1.88 billion, from $1.85 billion the previous year. Net earnings increased 57 percent, to $165.6 million, or $1.32 per share, from $106 million, or 82 cents per share the previous year. When adjusted to factor out one-time costs and other issues, earnings per share rose 9.1 percent.
Darden’s stock rose more than 8 percent in Tuesday morning trading on the earnings, which beat analysts’ expectations, as well as the Cheddar’s acquisition.
Overall, same-store sales at Darden’s seven brands increased 0.9 percent in the third quarter.
Same-store sales at The Capital Grille brand increased 0.9 percent, while same-store sales rose 4.7 percent at Eddie V’s, 0.8 percent at Seasons 52 and 0.5 percent at Bahama Breeze. Same-store sales fell 1 percent at Yard House.
Contact Jonathan Maze at [email protected]
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