Darden Restaurants Inc., the nation’s largest casual-dining operator, reported Wednesday a 6-percent, year-to-year drop in its fourth-quarter profit amid what it said was month-to-month sales volatility and cautious consumer sentiment.
Orlando-based Darden, which operates 1,824 restaurants under brands including Red Lobster and Olive Garden, reported net income of $115.6 million, or 80 cents per share, for the fourth quarter ended May 30. In the same quarter a year earlier Darden earned $123 million, or 87 cents per share.
Darden took a pre-tax, non-cash correction of $12.7 million in the fourth quarter associated with its third-quarter estimate of gift-card redemptions, which reduced net earnings by about 5 cents a share.
Total sales in the latest quarter fell 5.7 percent to $1.86 billion. Blended same-store sales for Olive Garden, Red Lobster and Longhorn Steakhouse fell 2.3 percent.
“Our financial performance for the quarter was solid, capping a year of strong earnings growth despite very challenging economic and consumer conditions,” Clarence Otis, Darden’s chairman and chief executive, said in a statement.
“The month-to-month sales volatility we saw in our industry during the quarter is an indication that consumers remain cautious,” he said.
For the full year, net earnings totaled $404.5 million, or $2.84 per share, compared with $372.2 million, or $2.65 per share, a year earlier. Fiscal 2009 included an extra fiscal week that added about 6 cents a share. For the year, sales totaled $7.11 billion, down about 1.4 percent from the year before.
By brand, Darden’s results included:
Olive Garden: With 723 units at the end of the quarter, the Italian chain reported fourth-quarter 13-week sales of $848 million, down 4.8 percent from the year-ago 14-week quarter. U.S. same-store sales fell 1.5 percent. Average annual restaurant sales totaled $4.7 million.
Red Lobster: With 694 units, the seafood chain reported fourth-quarter sales of $663 million, down 9.6 percent from a year ago, which included an additional week. U.S. same-store sales fell 4.6 percent. Average annual restaurant sales totaled $3.6 million.
Longhorn Steakhouse: With 331 units, the casual steakhouse chain reported fourth-quarter sales of $233 million for 13 weeks, down 2.5 percent from a year ago when the company had a 14-week fourth quarter. U.S. same-store sales rose 1.8 percent. Average annual sales per restaurant totaled $2.7 million.
The Capital Grille: With 40 units, the upscale steakhouse chain reported fourth-quarter sales of $64 million, up 9.4 percent from the year-ago quarter. Same-store sales increased 4.7 percent. Average annual sales per restaurant totaled $6.2 million.
Bahama Breeze: With 25 units, the varied menu chain reported fourth-quarter sales of $38 million, down 2.9 percent from the same quarter a year ago. Same-store sales increased 1.2 percent. Average annual sales per restaurant totaled $5.4 million.
Darden did not break out separate figures for its 11 Seasons 52 restaurants.
Contact Ron Ruggless at [email protected].