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.
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