rain
Saturday July 4th, 2015 6:12AM

Darden profit rises even as Red Lobster struggles

By The Associated Press
NEW YORK - Darden Restaurants Inc. said Friday that its fiscal first-quarter net income rose 4 percent even as it struggled to grow a key revenue figure at its flagship Olive Garden and Red Lobster chains.

Its earnings beat Wall Street expectations, and its shares rose more than 4 percent in premarket trading.

At Olive Garden, the company's biggest chain, Darden has been trying to increase sales by retooling its marketing message and updating its menu. Although traffic at established restaurants declined during the quarter, the company said a key sales figure edged up 0.3 percent on higher prices.

At Red Lobster, sales at restaurants open at least a year fell 2.6 percent as traffic declined. The sales metric is a key indicator of health because it strips out the impact of newly opened and closed locations.

The Orlando, Fla.-based company noted that its Red Lobster chain was up against a tough comparison because sales at restaurants open at least a year rose 10.7 percent in the year-ago quarter. It also noted that traffic picked up in the final month of the quarter.

Darden stood by its fiscal 2013 forecast that revenue is expected to increase 9 percent to 10 percent, mostly as a result of the addition of as many as 110 new restaurants.

Combined revenue at Olive Garden, Red Lobster and LongHorn locations open at least a year in the U.S. is anticipated to rise 1 percent to 2 percent. Darden expects earnings from continuing operations to climb 5 percent to 9 percent for the year.

For the three months ended Aug. 26, the company said it earned $110.8 million, or 85 cents per share. That's compared with $106.6 million, or 78 cents per share, a year ago. Earnings from continuing operations were 87 cents per share.

Analysts expected earnings of 83 cents per share, according to a FactSet survey.

Shares of Darden rose $2.29, or 4.2 percent, to $57.01 per share before the market open. That would take it above its 52-week high in regular trading of $55.84 set in mid-May.

Revenue rose 5 percent to $2.03 billion from $1.94 billion a year ago, meeting Wall Street's expectations. The boost was driven by new restaurant openings.

At LongHorn Steakhouse, revenue at restaurants open at least a year rose 3.6 percent.

Darden also declared a quarterly dividend of 50 cents per share. The dividend will be paid on Nov. 1 to shareholders of record on Oct. 10.

The company owns and runs more than 2,000 restaurants.
  • Associated Categories: Business News
© Copyright 2015 AccessWDUN.com
All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without permission.
Fiscal cliff may determine gas prices at start of 2013
Retail gas prices climb as 2012 comes to end. While gas prices are likely to rise into next year, whether or not a deal is made to avoid the fiscal cliff will determine if prices continue on an upward trend.
6:18AM ( 2 years ago )
Business News
USDA to step up bird flu monitoring this fall; aimed at protecting poultry industry
The federal government announced plans Thursday to step up monitoring wild birds for avian influenza this fall to provide an early warning of any resurgence of a disease that devastated poultry farms in the Upper Midwest.
4:25PM ( 1 day ago )
Applications for US jobless aid rise to still-low 281,000
WASHINGTON (AP) — More people sought U.S. unemployment benefits last week, but the level of applications is still low and points to an improving job market.The Labor Department says weekly application...
4:15PM ( 1 day ago )
US unemployment falls to 7-year low, but wages are flat
WASHINGTON (AP) — U.S. unemployment fell to a seven-year low of 5.3 percent and employers hired at a solid pace in June, but other gauges of the job market drew a bleaker picture: A wave of people sto...
2:41PM ( 1 day ago )
Ford recalls 432K cars because of software problem
NEW YORK (AP) — Ford is recalling 432,000 Focus, C-Max and Escape vehicles because of a software problem that could keep their engines running after drivers try to shut them down.Ford Motor Co. says t...
12:46PM ( 1 day ago )
Gainesville company named to list of top 300 U.S. investment firms
The Financial Times, a London-based international business publication, has named Gainesville-based Willis Investment Counsel to its 2015 list of the top registered investment advisers in the U.S.
By AccessWDUN staff
11:55AM ( 1 day ago )