ORLANDO, Fla. – Darden Restaurants Inc. expects diluted net earnings per share from continuing operations for its fiscal third quarter ending Feb. 26, 2012, to be approximately $1.23 to $1.25, the company said Feb. 23.
Blended US same-restaurant sales for Olive Garden, Red Lobster and LongHorn Steakhouse for the third quarter will increase approximately 4 percent compared to the prior year, and blended US same-restaurant sales for the company's Specialty Restaurant Group will increase approximately 6 percent. The company forecasted US same-restaurant sales for the third quarter to advance roughly 7 percent at LongHorn Steakhouse, 6 percent at Red Lobster and 2 percent at Olive Garden.
Darden attributed the results to a shift in the Lenten season, which started after the fiscal third quarter in 2012 but during the fiscal fourth quarter in 2011. Also, a less severe winter has helped results to the tune of a 200 basis points increase. The company estimated blended same-restaurant sales growth for Olive Garden, Red Lobster and LongHorn Steakhouse for the third quarter is approximately 70 basis points higher due to the Lenten season shift. Estimated same-restaurant sales growth at Red Lobster, whose national LobsterFest promotion is tied to the Lenten season, is approximately 190 basis points higher due to the shift in the season, the company said.
"We're pleased with the results we've seen thus far in the third quarter," said Clarence Otis, chairman and chief executive officer of Darden. "Each of our brands has solid sales momentum and, as we've anticipated for some time now, our year-over-year cost comparisons are trending in the right direction.
"As a result, we expect strong earnings growth the second half of the year and are affirming our sales and diluted net earnings per share outlook for the full fiscal year," he added. " One of the things we can't control, of course, is weather. And, certainly, more severe weather than anticipated during the balance of the winter would adversely affect both sales and earnings. We are, however, confident in our promotional and other strategies and in our underlying momentum. And we continue to believe that beyond this fiscal year, we have everything it takes to continue growing market share profitably and continue creating the kind of superior value our shareholders expect."
Darden affirmed its full-year guidance for US same-restaurant sales growth in fiscal 2012 of approximately 2.5 percent to 3.0 percent for Red Lobster, Olive Garden and LongHorn Steakhouse. The company also expects to open approximately 85 to 90 net new restaurants (excluding the addition of 11 Eddie V's restaurants) in fiscal 2012.
Total sales growth is forecasted at 7.0 percent to 7.5 percent in fiscal 2012, and diluted net earnings per share growth to be between 4 percent and 7 percent.
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