Bloomberg Anywhere Remote Login Bloomberg Terminal Demo Request

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Bloomberg Customers

Darden Falls After Olive Garden Sales Decline Damps Forecast

Darden Restaurants Inc. plunged the most in more than three years after saying sales and profit this year will grow more slowly than previously forecast as the restaurant operator works to revive its Olive Garden chain.

Darden fell 12 percent to $41.82 at the close in New York, the biggest decline since Aug. 26, 2008. The shares have lost 9.9 percent this year.

Earnings per share from continuing operations will rise 4 percent to 7 percent in the year ending in May, down from a previous forecast for a 12 percent to 15 percent gain, the Orlando, Florida-based company said today in a statement.

The restaurant operator has sought to attract frugal diners with a lower-priced menu at its Olive Garden chain. Darden will continue to develop food items and new advertising for the Italian eatery, Chief Executive Officer Clarence Otis said in today’s statement.

“We’re confident these investments will help Olive Garden get back on track,” Otis said.

Sales at Olive Garden stores open at least 16 months fell 5.7 percent in November, compared with gains at Red Lobster and LongHorn Steakhouse.

“The traffic in casual dining is still pretty weak,” said Peter Saleh, an analyst at Telsey Advisory Group in New York. Olive Garden “needs to come out with a good value offering and they have to promote it,” he said in an interview.

Total sales growth for fiscal 2012 will be 6 percent to 7 percent, less than a prior forecast of 6.5 percent to 7.5 percent, Darden said.

The company, which also owns the Capital Grille and Seasons 52 brands, has more than 1,900 restaurants.

Darden is scheduled to report fiscal second-quarter results on Dec. 16.

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.