Reuters: Global Markets: Olive Garden improvement lifts Darden profit

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Olive Garden improvement lifts Darden profit Mar 23rd 2012, 12:20 Fri Mar 23, 2012 8:20am EDT (Reuters) - Darden Restaurants Inc's (DRI.N) Olive Garden chain, which generates almost half of company revenue, posted its first rise in quarterly same-restaurant sales in more than a year, lifting quarterly profit. Darden, which also operates Red Lobster and LongHorn Steakhouse restaurants, got help from mild winter weather and an earlier Lenten season, lifting sales at all three chains. The company benefited from what Chief Executive Clarence Otis said was a "moderating" rise in the cost of food, as well as an increase in the number of diners coming through the doors of its major chains. Sales at Olive Garden's U.S. restaurants open at least 16 months were up 2 percent during the third quarter, with the biggest rise coming in February, which was unusually mild across much of the country. Darden had not reported a quarterly rise in Olive Garden same-store sales since the period ended November 28, 2010. At Darden's main three chains, U.S. same-restaurant sales were up a combined 4.1 percent. At Red Lobster, which generates a third of overall sales, they rose 6 percent. The Christian season of Lent landed in Darden's third quarter this year but was in its fourth quarter a year earlier. Darden's Red Lobster seafood chain schedules its LobsterFest specials during the Lenten season, when some Christians avoid meat. The company, which has reworked menus and increased promotions at the Italian-themed Olive Garden chain, reaffirmed its forecast for growth in its full-year earnings per shares from continuing operations of 4 percent to 7 percent. Darden sees U.S. same-restaurant sales at its main three chains to be up 2.5 percent to 3 percent this year. Darden's smaller chains include The Capital Grille and Bahama Breeze. Earnings at the Orlando, Florida-based company were $164.1 million, or $1.25 per share from continuing operations, for the third quarter ended February 26, up from $151.2 million, or $1.08 a share, a year earlier. That beat Wall Street forecasts by a penny, according to Thomson Reuters I/B/E/S. Overall sales rose 9.3 percent to $2.16 billion, above the $2.14 billion Wall Street was expecting. (Reporting By Phil Wahba in New York and Lisa Baertlein in Los Angeles; Editing by Gerald E. McCormick) Link this Share this Digg this Email Reprints

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