Olive Garden comeback: Darden Restaurants’ 3rd-quarter profit up
Maybe it’s Marilyn Hagerty working her magic: Olive Garden is reversing out of a long slump with more visitors and better sales.
A few weeks after the elderly North Dakota reviewer’s piece on a new Olive Garden restaurant in Grand Forks went viral, the chain’s parent company, Darden Restaurants Inc., said its fiscal third-quarter profit soared more than 8% to $164.1 million, or $1.25 a share, from $151.7 million, or $1.08, in the same period a year earlier.
Sales were improving, the company said, with a 9.3% jump to nearly $2.2 billion from less than $2 billion. Same-store revenue at Darden’s three major restaurant chains -- Olive Garden, Red Lobster and LongHorn Steakhouse -- were up 4.1%.
Part of the improvement comes from the unseasonably pleasant weather, executives said, but they also said the effort to spruce up the Italian-style Olive Garden was paying off.
Miserable sales at the eatery had dragged down Orlando, Fla.-based Darden’s earnings 28% in the second quarter.
The chain’s $957 million in sales over the quarter was a 5.5% improvement on the same period a year earlier, as higher food costs were offset by cheaper labor and increasing traffic. Sales in February alone were 4.3% better than in January.
Olive Garden has dozens of branches in California and makes up the largest single segment of Darden’s 1,900 outlets.
“We are particularly pleased with the progress Olive Garden is making to improve the value and overall guest experience it offers,” Darden Chief Executive Clarence Otis said in a statement. “With its continuing improvement, solid momentum at our other brands and moderating food cost inflation, we continue to anticipate strong earnings growth in the fourth quarter and remain excited about what we can achieve next year and beyond.”
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