Darden cites failed promotions for lower outlook
That guidance is based on expectations of total sales growth of between 7.5 percent and 8.5 percent, boosted by contributions from about 100 new restaurants, not including the initial 40 Yard House restaurants operating at the close of the acquisition. It previously projected a revenue increase of 9 percent to 10 percent.
Revenue at Red Lobster, Olive Garden and LongHorn Steakhouse restaurants open at least a year is expected to be flat to down 1 percent.
The announcement comes just weeks after the company announced several changes at its flagship chains. At Olive Garden, Darden is updating its marketing and putting a greater emphasis on value and lighter fare. At Red Lobster, the company is expanding its menu to appeal to diners who might not like seafood.
Based on the company's fiscal 2012 revenue of $8 billion, the new guidance projects fiscal 2013 revenue of $8.6 billion to $8.68 billion. Analysts had expected $8.75 billion. Darden plans to release its final fiscal second-quarter sales and earnings results before the markets open on Dec. 20.
Darden shares fell $5.02, or 9.6 percent, to close at $47.40 Tuesday, after dropping as low as $46.58. Over the past 52 weeks, the company's shares have traded between $41.65 and $57.93.