LOS ANGELES (Reuters) - Olive Garden and Red Lobster owner Darden Restaurants Inc DRI.N reported quarterly profit that topped Street estimates, but a key measure of restaurant sales fell short of some targets and shares shed almost 2 percent.
The Orlando, Florida-based company, one of the top performing full-service dining chains, said net income from continuing operations was $113.3 million, or 80 cents per share, for the fiscal first quarter ended August 29, up from $95 million, or 67 cents per share, in the year-earlier period.
Analysts, on average, were looking for a profit of 77 cents per share in the latest quarter, according to Thomson Reuters I/B/E/S.
Sales from continuing operations were up 4.2 percent at $1.81 billion.
Blended same-restaurant sales for Olive Garden, Red Lobster and LongHorn Steakhouse were up 1.1 percent for the quarter, better than the industry average as compiled by Knapp-Track, but below the 2.3 percent rise some analysts expected.
The company also backed its earlier call for earnings growth of 14 percent to 17 percent for its fiscal year ending May 2011, which translates into $3.26 to $3.35 per share of net income. It also reiterated its call for same-restaurant sales growth of 2 percent to 3 percent at Olive Garden, Red Lobster and LongHorn Steakhouse combined.
Shares in Darden, which also owns the upscale Capital Grille steakhouse chain, closed down 2.2 percent to $44.02 before falling further to $43.20 in extended trade after the news was released following the regular-session close.
Reporting by Lisa Baertlein; Editing by Phil Berlowitz
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