ORLANDO Fla. Darden Restaurants Inc., operator of 1,702 casual-dining restaurants, said it recorded a higher fourth quarter profit on a 25-percent surge in total sales that was driven by flagship Olive Garden's strong performance.
For the quarter ended May 25, Darden posted net earnings from continuing operations of $103.3 million, or 72 cents per share, compared with $98.5 million, or 67 cents per share, in the year-ago period. Excluding costs and adjustments related to its purchase last year of LongHorn Steakhouse and Capital Grille parent Rare Hospitality Inc., Darden's per-share net earnings would have totaled 78 cents, the company said. That beat Wall Street's prediction of 75 cents per share.
Including discontinued operations, earnings were $101.8 million, or 71 cents per share, said Darden, which sold its Smokey Bones brand earlier this year.
Darden's sales for the quarter shot up 25 percent, to $1.83 billion, the company said. Olive Garden contributed the most, posting sales of $798 million for the quarter, an 11-percent increase over the chain's sales last year.
Olive Garden was Darden's only concept to post positive same-store sales, with a 5.8 percent increase. Quarterly same-store sales fell 0.2 percent at Red Lobster, 3.1 percent at LongHorn Steakhouse, 3.8 percent at Capital Grille, and 3.7 percent at Bahama Breeze.
Despite the negative same-store sales of most of its brands, Darden officials were upbeat about the company's overall showing in the fourth quarter and full year.
"We once again delivered competitively superior financial results," said Clarence Otis, chairman and chief executive of Darden, said in a statement. "And we were able to do so while making considerable strategic progress and navigating a challenging consumer and cost environment."
For the full year, Darden posted net earnings from continuing operations of $369.5 million, or $2.55 per share, on total sales of $6.63 billion. Last year Darden earned $377.1 million, $2.53 per share, on a continuing basis.
At the end of fiscal 2008, Darden's system included 680 Red Lobsters, 653 Olive Gardens, 305 LongHorn Steakhouses, 32 Capital Grilles, 23 Bahama Breeze units and seven Seasons 52 restaurants.
Looking forward, Darden said it expects earning per share on a continuing operations basis to grow to about $2.90 and $2.93 per share in fiscal 2009. The company added that it expects combined U.S. same-store sales growth of between 2 percent and 4 percent for Red Lobster, Olive Garden and LongHorn.
