Darden misses quarterly estimates as Olive Garden sales growth slows
DRI•Darden Restaurants narrowly missed first-quarter estimates as Olive Garden same-restaurant sales growth slowed to 1.1%. Quarterly sales rose 5.1% to $3.20 billion, adjusted profit was $2.05 per share, and the company maintained its annual targets.
1. Olive Garden growth slows
Olive Garden same-restaurant sales rose 1.1% in the first quarter, down from 5.9% a year earlier and below analysts’ 1.65% estimate. Executives cited weakness in the chain’s lunch business.
2. Value-focused menu plans
Darden plans to increase marketing for Olive Garden’s unlimited soup, salad and breadsticks lunch specials, promote lighter portions and expand protein-forward dinner options. CEO Rick Cardenas said, “Guests are looking for great value at an appropriate price.”
3. Traffic and results
Executives said traffic improved steadily during the quarter and gained momentum in September. Quarterly sales increased 5.1% to $3.20 billion, while adjusted profit from continuing operations was $2.05 per share, below expectations of $2.06. Darden maintained its annual targets.
