(Adds LOS ANGELES dateline, new throughout)
LOS ANGELES, Sept 16 Darden Restaurants Inc
(DRI.N) on Tuesday posted a sharply lower quarterly profit as
customer traffic to its Red Lobster, Olive Garden, LongHorn
Steakhouse and other chains missed company targets amid a weak
Fiscal first-quarter profit from continuing operations was
$82.4 million, or 58 cents per share, down from $106.6 million,
or 73 cents per share, a year earlier.
Excluding charges related to integration costs and
purchasing accounting adjustments, earnings from continuing
operations were 61 cents per share, matching analysts'
consensus estimate compiled by Reuters Estimates.
Revenue from continuing operations rose 21 percent in the
quarter to $1.77 billion, including $270 million of sales from
LongHorn Steakhouse and The Capital Grille, which Darden
acquired last fiscal year through its roughly $1.2 billion
purchase of Rare Hospitality International Inc.
Sales at restaurants open at least 16 months fell 1
percent, led by a 4.9 percent drop at LongHorn Steakhouse and a
3.7 percent decline at Red Lobster. Sales at Olive Garden rose
Casual dining restaurants -- the moderately priced,
sit-down chains run by Darden and rivals like Brinker
International Inc (EAT.N) and DineEquity Inc (DIN.N) -- have
been hammered by the housing market downturn, and soaring
gasoline prices have forced many consumers to cut back on meals
outside the home. Darden is broadly viewed as one of the
group's top performers.
Darden issued a profit warning on Aug. 26, when it also
lowered financial outlooks for the full year.
The company on Tuesday reiterated its lowered forecast for
2009 same-restaurant sales to be flat to up 1 percent for Red
Lobster, Olive Garden and LongHorn Steakhouse combined.
It also repeated its forecast for a 5 percent to 10 percent
per-share increase in earnings from continuing operations,
including costs related to the Rare acquisition.
Excluding integration costs and purchase accounting
adjustments, said it still expects per-share earnings to be
flat to up 5 percent from the $2.74 it posted in fiscal 2008.
Shares of Darden rose 37 cents to close at $29.89 on the
New York Stock Exchange.
(Reporting by Lisa Baertlein, editing by Richard Chang)