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Darden's 4Q Net Jumps 8.5% as Olive Garden Stabilizes

Olive Garden restaurant

 (Reuters)

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.

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.

Follow Matt Egan on Twitter @MattMEgan5