More Locations Boost Revenue for Darden Restaurants in Q3

Andrew Klips |

Shares of Darden Restaurants, Inc. (DRI) are edging upward in early Friday trading as the company reported falling same-store-sales at its flagship restaurants during the third quarter, but a rise in sales in its specialty segment to top analyst earnings expectations.

For the quarter ended February 24, 2013, the Orlando-based restaurant operator recorded total revenue of $2.26 billion, a 4.6 percent increase from $2.16 billion in the year prior quarter. Net profit for the quarter was $134.4 million, or $1.02 per share, much lower than the $164.1 million, or $1.25 per share, posted a year earlier.



Wall Street was expecting Darden to report profits of $1.01 per share on revenue of $2.26 billion.

Darden noted that the expenses associated with its acquisition of Yard House USA at the start of the second quarter negatively impacted earnings in the third quarter by 2 cents per share.

The company’s big three, Olive Garden (-4.1%), Red Lobster (-6.6%) and Longhorn Steakhouse (-1.6%) all saw U.S. same-store-sales slump in the third quarter, but those overall decreases were partially offset by additional sales from newly-opened restaurants. Darden opened 42 new Olive Gardens, 42 new Longhorn Steakhouses and 2 new Red Lobsters in the past year.

Darden’s specialty restaurant businesses, which include The Capital Grille, Bahama Breeze, Yard House and Seasons 52, experienced a 61 percent spike in total sales to $287 million, driven by the addition of 43 Yard House restaurants now in its sales stream and new locations for each of the other brands as well. Same-store-sales grew at each restaurant brand in the third quarter except for Bahama Breeze, which only contracted by 0.3 percent.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
TXN Texas Instruments Incorporated 81.12 0.33 0.41 2,812,210 Trade
DRI Darden Restaurants Inc. 87.95 -0.15 -0.17 708,442 Trade

Comments

Emerging Growth

Veritas Pharma Inc.

Veritas Pharma Inc, formerly Seashore Organic Medicine Inc is an emerging producer and distributor of medical marijuana.

Private Markets

D-Wave

D-Wave Systems is the first quantum computing company. Its mission is to integrate new discoveries in physics, engineering, manufacturing, and computer science into breakthrough approaches to computation to help solve…

WayBetter

The spark hit Jamie when he saw co-workers competing to lose weight. Instead of pizzas and subs, they were eating salads and jogging along the river. Some were sneakily leaving…