ORLANDO-Darden Restaurants had yet another strong quarter, with strong increases in net earnings, revenues and same-store sales for three of its four brands. “We’re very pleased with our performance during the third quarter,” said the chain’s president and COO Drew Madsen during the company’s earnings conference call Wednesday.

For the third quarter fiscal 2006, net earnings were $105.3 million, or 67 cents per diluted share, on sales of $1.47 billion. Last year, net earnings were $92.6 million, or 56 cents per diluted share, on sales of $1.38 billion. These numbers represent a 15% increase in net earnings and 20% growth in earnings per share.

For the quarter, total sales were $1.47 billion, roughly 7.1% more than last year as a result of strong-same store sales growth at Olive Garden and Red Lobster. Olive Garden achieved its 46th consecutive quarter of US same-restaurant sales growth with a 5.7% increase, while Red Lobster’s US same-restaurant sales growth was 1.6% for the quarter, its 6th consecutive quarter of same-restaurant sales growth. The company said that same-store sales growth would have been 2% higher but Lent and Red Lobster’s signature Lobsterfest into this year’s fourth quarter adversely affected same-restaurant sales.

Specifically, Olive Garden’s third-quarter sales reached $689 million, up 9.8% from last year, while Red Lobster’s sales of $651.7 million were 2.5% above prior year. Bahama Breeze’s third-quarter sales totaled $38.2 million, up 1.8% from the prior year. Same-restaurant sales also increased 1.7% in the third quarter, primarily because of higher guest counts than last year as the company continued to successfully implement key elements of its turnaround plan.

The only dark spot in Darden’s performance was its results related to Smokey Bones. The barbeque chain achieved sales of $88.5 million during the quarter, an increase of 23.1% above last year, primarily because of 27 more restaurants in operation, including nine restaurants that were opened during the third quarter. Smokey Bones’ same-restaurant sales declined 5% in the quarter.

The chain also announced its February same-store sales results. Same-restaurant sales at Olive Garden were up approximately 3% driven by a 1% increase in guest counts and a 2% increase in check average. Same-restaurant sales at Red Lobster fell 7% to 8% for fiscal February on a 7% decrease in guest counts and a 1% decline in check average.

The chain revised upwards its sales and earnings guidance for fiscal 2006 and now expects diluted net earnings per share growth for fiscal 2006 to be at the top of its previously announced 15% to 20% growth range and same-restaurant sales growth of approximately 5% for Red Lobster and Olive Garden, and new unit growth of approximately 4%.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?


© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

Dig Deeper


GlobeSt Net Lease Spring 2024Event

This conference brings together the industry's most influential & knowledgeable real estate executives from the net lease sector.

Get More Information


Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2024 ALM Global, LLC. All Rights Reserved.