Darden Restaurants, Inc. (NYSE: DRI) today reported that it expects diluted net earnings per share from continuing operations for its fiscal third quarter ending February 27, 2011, to be approximately $1.04 to $1.06. The Company also estimates that blended U.S. same-restaurant sales for Olive Garden, Red Lobster and LongHorn Steakhouse for the third quarter will increase approximately +1.0% compared to the third quarter of prior year. For the fiscal third quarter, U.S. same-restaurant sales are estimated to be up approximately +1.5% at Olive Garden, down approximately -1.0% at Red Lobster and up approximately +4.5% at LongHorn Steakhouse. These estimated results include the adverse effects of a shift in the Lenten season, which moves entirely to the fiscal fourth quarter this year from a portion occurring in the fiscal third quarter last year, and of more severe winter weather quarter-to-date this year than last year. Estimated blended same-restaurant sales are approximately 20 basis points lower in the third quarter due to the Lenten season shift and approximately 80 basis points lower due to the more severe weather. The Company also reported that, at Red Lobster, estimated third quarter same-restaurant sales results are approximately 60 basis points lower due to the Lenten season shift. The Company expects to release its fiscal 2011 third quarter earnings on Thursday, March 24, 2011, after the market close.
Darden also announced that it expects diluted net earnings per share from continuing operations for fiscal 2011 to grow +17% to +18% from the diluted net earnings per share from continuing operations of $2.86 reported for fiscal 2010. This earnings growth projection for the fiscal year is above the estimated +14% to +17% increase the Company forecast in December in connection with the release of its fiscal second quarter results.
“As we expected, the economic environment continues to improve, and our brands continue to achieve competitively strong results,” said Clarence Otis, Chairman and Chief Executive Officer of Darden. “In addition, we have more clarity on our costs for the balance of the fiscal year. So, we are revising upward our outlook for earnings per share for the fiscal year. We recognize, of course, that factors beyond our control such as more severe than anticipated weather for the balance of the winter can adversely affect sales and earnings over the next few months. Still, our brands are well positioned and our teams are delivering more than ever on our promises to our guests. Strong brands and attentive teams have always been and will remain the key to our continued success.”
The Company indicated that its outlook for diluted net earnings per share from continuing operations for fiscal 2011 is based on its expectation of blended U.S. same-restaurant sales for the fiscal year for Olive Garden, Red Lobster and LongHorn Steakhouse of approximately +1.5% to +2.0% and total new restaurant growth of approximately 70 to 75 net new restaurants. The same-restaurant sales estimate is slightly lower than the Company’s earlier estimate of an increase of approximately +2.0% on a blended basis due primarily to the more severe than anticipated winter weather in the fiscal third quarter.