LOS ANGELES – Darden Restaurants Inc. (DRI), Wednesday reported better-than-expected quarterly earnings and raised its forecast for the year, citing strong performance at its Olive Garden chain and improvements at Red Lobster.
Net income for the fiscal third quarter ended Feb. 27 rose to $92.6 million, or 56 cents per share, from $77.1 million, or 45 cents per share, a year ago.
Wall Street analysts had expected the company to report earnings of between 49 cents and 57 cents per share with an average view of 51 cents per share, according to Reuters Estimates.
Sales rose more than 11 percent to $1.38 billion.
For fiscal 2005, Darden said it expects its net earnings per share to increase between 31 percent and 33 percent over last year. Excluding charges recorded in the fourth quarter of last year, the increase is expected to be between 19 percent and 21 percent — up from a previous forecast of 10 percent to 15 percent.
During the quarter, sales at Olive Garden (search) restaurants open at least 16 months rose 10.5 percent, including a rise in February of nearly 13 percent.
Same-store sales at Red Lobster (search), meanwhile, rose 5.1 percent during the quarter and 9 to 10 percent in February alone.
Aside from higher sales, the company said both of its flagship chains benefited from lower depreciation and amortization costs as a percentage of sales.
Darden has been trying to turn around Red Lobster, the nation's No. 1 seafood chain, for about a year and a half. In a statement, the company said the chain logged record guest satisfaction scores during the period that helped drive sales and operating profits.