Lifted by signs of life at its struggling Olive Garden restaurants and warm weather, Darden Restaurants (DRI) narrowly beat the Street on Friday with an 8.5% jump in fiscal third-quarter net income.
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The Orlando-based company, which also owns LongHorn Steakhouse and Red Lobster, said it earned $164.1 million, or $1.25 a share, last quarter. A year earlier it earned $151.2 million, or $1.08 a share. Analysts had been calling for EPS of $1.24.
Sales climbed 9.3% to $2.16 billion, narrowly exceeding the Street’s view of $2.14 billion. Operating margin shrank to 24.7% from 25.2%.
Darden benefited from a 5.5% rise in Oliver Garden sales last quarter to $957 million. Sales also jumped 7.4% at Red Lobster to $712 million and same-store sales at Longhorn soared 16.2%. Same-store sales were up 4.1% at the combined three restaurants.
“While favorable weather certainly helped, each had excellent or improving underlying business strength,” CEO Clarence Otis said in a statement. “We are particularly pleased with the progress Olive Garden is making to improve the value and overall guest experience it offers.”
Despite the results, shares of Darden slipped 0.19% to $51.73. Darden is up almost 14% year-to-date.