Profits for the third quarter at Darden’s were down by 18%, as lower sales at Red Lobster hurt earnings. However, the restaurant chain still beat Wall Street estimates. The Orlando, Florida based company said last week that sales at LongHorn Steakhouses, Red Lobster and Olive Garden restaurants opened for more than one year fell by a combined 4.6%.
Stores opened for at least a year is a good way to gauge the performance of a restaurant since it excludes results from restaurants recently opened as well as restaurants that have just closed. Darden’s Restaurants Inc continues to struggle in its attempt to regain its foothold in the industry as more diners head to other chains such as Panera and Chipotle, looking for restaurant quality food served at much lower prices.
At a time when the chain is looking to find different ways to stay abreast of changing trends in the industry, a pay at the counter trial concept has started in two locations of Red Lobster near its corporate headquarters.
Darden’s profits for the latest three months ended February 24 were $134.5 million equal to $1.02 per share. That figure was down from the same quarter a year ago of $164 million or $1.25 per share. Wall Street analysts had estimated that the restaurant chain would earn a per share amount of $1.01.
Revenue was off by 6% at Red Lobster, up slightly for the Olive Garden chain and up 7% for the LongHorn Steakhouse chain. Overall, revenue increased by 5% to more than $2.67 billion compared to $2.15 billion from a year ago.
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