Olive Garden parent Darden (DRI) posted a stronger-than-expected first-quarter profit on Friday and said it plans to open another 110 restaurants in 2013.
The operator of restaurant chains like Red Lobster and LongHorn Steakhouse posted net income of $110.8 million, or 85 cents a share, compared with a year-earlier $106.6 million, or 78 cents, topping average analyst estimates in a Thomson Reuters poll by a penny.
Revenue for the three months ended Aug. 26 was $2.03 billion, up 4.8% from $1.9 billion a year ago and matching the Street’s view.
"We're pleased with our very solid start to the fiscal year," Darden CEO Clarence Otis said in a statement. “We also benefited from our diverse food basket, with a decline in seafood costs on a year over year basis moderating the significant spike in the cost of beef."
Same-store sales grew 2.2% during the quarter, led by the addition of another 92 new restaurants and 11 Eddie V’s restaurants, which Darden acquired in Nov. 2011. Partially offsetting the gains was a slight decline in Olive Garden, Red Lobster, and LongHorn Steakhouse.
Darden, which plans to open 100 to 110 new restaurants in fiscal 2013, affirmed its full-year outlook of same-store sales growth between 1% and 2%. The company sees sales and earnings growth between 9% and 10% and 5% and 9%, respectively.