Full service restaurant company Darden (NYSE:DRI), who operates Olive Garden, Red Lobster, and LongHorn Steakhouse, announced its fiscal first-quarter net income rose 4% beating analyst expectations despite disappointing lower revenues at both Olive Garden and Red Lobster.
Darden earned $110.8 million, or 85 cents per share for the quarter compared with $106.6 million, or 78 cents per share a year ago, and better than the 83 cents per share anticipated by analysts at FactSet. Darden also declared a quarterly dividend of 50 cents per share payable on Nov. 1 to shareholders of record on Oct. 10.
In addition to the higher earnings, Darden reiterated its fiscal 2013 revenue forecast, indicating revenue is expected to increase 9 percent to 10 percent, mostly as a result of the addition of as many as 110 new restaurants.
Darden has been trying to boost sales at its largest chain, Olive Garden, with an updated menu and new marketing message. While traffic into the restaurants decreased over the quarter, Darden managed to show in increase in revenues.
Darden’s Red Lobster chain saw sales for restaurants open at least one year drop by nearly 3% compared to a 10.7 percent rise in the year-ago quarter.
Meanwhile its LongHorn Steakhouse restaurants posted a 3.6% increase in same-restaurant sales, better than a forecast 3.2% growth.
Overall revenue rose 5 percent to $2.03 billion from $1.94 billion a year ago boosted by new restaurant openings.
Shares of Darden are up over 4% in morning trading.
-Written by IP Staff