Darden Restaurants Inc.’s fiscal first-quarter earnings fell 5.8% as the casual-dining company continues to face the same problems of fiscal 2011: higher commodity costs, declining guests at Olive Garden and increasingly cost-conscious consumers.
Darden, which also operates Red Lobster and LongHorn Steakhouse, has traditionally outperformed casual dining competitors, especially in dreary economic environments when it refuses to give in to the industry’s extensive discounts that rake in customers at the expense of margins. But lately, its peers are gaining ground.
“The fundamental strategic challenge we’ve faced in the near-term is how to address the growing need for affordability demanded by our guests, while also protecting our margins given significant commodity cost inflation,” said Chief Operating Officer Drew Madsen.