Darden Restaurants, parent of many brands, including Olive Garden, LongHorn Steakhouse, and Cheddar’s reported earnings today and commented on the outlook for the rest of the year.
At the major brands, Oliver Garden and LongHorn, the company reported positive same store sales (Comps) that were both driven by positive pricing and menu mix, but results were offset by negative traffic. Negative traffic remains an issue at most restaurant brands.
Olive Garden Comps were up 3.5% in the quarter. This was better than analysts expected (consensus +3.2%) Traffic was a negative -0.8%.
LongHorn Steakhouse comps were up 2.9% and were also better than analyst expectations (+2.2%) Traffic was almost flat at -0.1%.
Cheddar’s, a recent acquisition, suffered -4.0% comps and were worse than analyst expectations (consensus -3.2%)
Other brands that experienced positive comps were The Capital Grille (+3.7%) and Eddie V’s (+0.9%) Bahama Breeze (-1.1%), Yard House (-1.1%) and Seasons (-0.8%) all experienced negative comps.
On the profitability front, restaurant margins (19.6%) came in better than expected (18.9%) Labor inflation was up 3.5% during the quarter, and pricing more than offset commodity inflation.