Darden Restaurants Inc. (NYSE:DRI) reported fiscal first-quarter sales of $1.94 billion, up roughly 7.5% from the same period the year earlier. Still, first-quarter profits were down 5.7%, from $113.3 million during the first quarter of 2010, to $106.8 million during the first quarter in 2011.
The rising cost of commodities and the effects of Hurricane Irene are to blame for the reduced profits, says Clarence Otis, chairman and chief executive of Darden Restaurants. Hurricane Irene closed restaurants along the East Coast for an aggregate 151 days. Diluted net earnings per share were 78 cents, down 3% from 80 cents in the first quarter of last year.
Investing Insights: Exclusive PIMCO Interview: What Will Drive Commodities Higher for Years?
Sales at Red Lobster restaurants were up 10.7% during the first quarter, sales at The Capital Grille were up 7%, LongHorn Steakhouse sales edged up 4.8%, Bahama Breeze sales were up 2.9%, and Seasons 52 sales climbed 2.5%. Only Olive Garden saw sales decline during the first quarter, falling 2.9%.
“Olive Garden remains one of the strongest brands in the full-service restaurant industry and we are working to improve its sales performance,” said Otis. Next year, Darden plans to open 80-90 net new restaurants, expecting sales growth between 6.5% and 7.5% in fiscal 2012. Darden employs 180,000 people and has annual sales of roughly $7.5 billion.
Competitors to Watch: Landry’s Restaurants, Inc (LNY), Ruth’s Hospitality Group, Inc. (NASDAQ:RUTH), Bravo Brio Restaurant Group, Inc. (NASDAQ:BBRG), Granite City Food & Brewery Ltd. (NASDAQ:GCFB), O’Charley’s Inc. (NASDAQ:CHUX), Ark Restaurants Corp. (NASDAQ:ARKR), Morton’s Restaurant Group, Inc. (NYSE:MRT), Red Robin Gourmet Burgers, Inc. (NASDAQ:RRGB), and McCormick & Schmick’s Seafood Restaurant (NASDAQ:MSSR).
For more historical perspective on Darden earnings, check out Your Cheat Sheet to Darden Restaurants Earnings.