Darden Restaurants Projects Strong 3Q Earnings

Darden Restaurants (NYSE:DRI) said Thursday that it projects earnings for the fiscal third quarter of $1.23 to $1.25 a share, better than the $1.19 that Wall Street analysts are projecting.

The company, which owns Olive Garden, Red Lobster and LongHorn Steakhouse, also estimates that sales for these restaurants will increase approximately 4% and sales for the company’s Specialty Restaurant Group will increase approximately 6% for the third quarter.

U.S. same-restaurant sales among the company’s large brands are estimated for the third quarter  to be up approximately 7% at LongHorn Steakhouse, 6% at Red Lobster and 2% at Olive Garden.

Darden reported that estimated same-restaurant sales results benefited from a shift in the Lenten season, which started during the fiscal third quarter this year but during the fiscal fourth quarter last year, and from less severe winter weather quarter-to-date this year than last year.

Darden’s fiscal third quarter ends February 26, allowing for Ash Wednesday and the first Friday of Lent, when the devout religious substitute meat dishes for food like seafood and pasta.

The estimated third-quarter same-restaurant sales growth at Red Lobster, whose popular national LobsterFest feature is sure to benefit from the Lenten season, is approximately 190 basis points higher due to the shift in season.

"We're pleased with the results we've seen thus far in the third quarter," chief executive Clarence Otis said. "Each of our brands has solid sales momentum and, as we've anticipated for some time now, our year-over-year cost comparisons are trending in the right direction." The company expects to release its fiscal 2012 third quarter earnings on March 23.