NEW YORK (AP) — Darden Restaurants' third-quarter net income dropped 18 percent, as it dealt with soft sales at Red Lobster but the performance still beat Wall Street's expectations.
The Orlando, Fla., company said Friday that sales at its Olive Garden, Red Lobster and LongHorn Steakhouse restaurants open at least a year fell a combined 4.6 percent.
This figure is a key gauge of a restaurant operator's performance because it excludes results at store recently opened or closed.
Darden Restaurants Inc. has been struggling to make its brands relevant again as diners increasingly head to chains like Chipotle and Panera, where they feel they're getting restaurant-quality food without paying as much. As it looks for ways to catch up to shifting trends, Red Lobster this week started testing a "pay-at-the-counter" concept at two location near the its headquarters.
For the three months ended Feb. 24, Darden earned $134.4 million, or $1.02 per share. That's down from $164.1 million, or $1.25 per share, a year earlier.
Analysts polled by FactSet expected earnings of $1.01 per share.
Revenue rose 5 percent to $2.26 billion from $2.16 billion, matching Wall Street's view.
Revenue for the specialty restaurant group surged 61 percent, buoyed by the addition of some Yard House restaurants, as well as new restaurants for The Capital Grille, Bahama Breeze and Seasons 52.