Darden Restaurants 1Q profit, revenue rises

Associated Press

ORLANDO, Fla. (AP) — Darden Restaurants' fiscal first-quarter net income rose 4 percent even as it struggled to grow key revenue figures at its Olive Garden and Red Lobster chains.

Its earnings beat Wall Street expectations, and its shares edged up in premarket trading.

The Orlando, Fla.-based company earned $110.8 million, or 85 cents per share, in the three months ended Aug. 26 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 28 cents to $55 before the market open. That would take it close to its 52-week high 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.

Darden Restaurants Inc. said Friday that combined revenue at Olive Garden, Red Lobster and LongHorn locations open at least a year dipped 0.3 percent.

This metric is a key indicator of health because it strips out the impact of newly opened and closed locations.

In the U.S., revenue at Olive Garden locations open at least a year edged up 0.3 percent while falling 2.6 percent at Red Lobster and climbing 3.6 percent at LongHorn Steakhouse.

Olive Garden is Darden's biggest chain and accounts for about half of its revenue.

The company maintained its fiscal 2013 forecast. It still expects earnings from continuing operations will climb 5 percent to 9 percent and revenue will increase 9 percent to 10 percent.

Combined revenue at Olive Garden, Red Lobster and LongHorn locations open at least a year in the U.S. is still anticipated to rise 1 percent to 2 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 and has more than 185,000 employees.

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