Must-know: Why Darden cares about Olive Garden’s same-store sales

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Darden Restaurants’ same-store sales

As discussed in the earlier part of the series, Darden Restaurants (DRI) operates an array of brands under its umbrella. Irrespective of any brand, it’s important to understand a restaurant’s performance from its existing location through same-store sales like we saw in the Tim Hortons (THI) series.

In Part 2, we’ll discuss each brand and each brand’s same-store sales information.

Olive Garden

Olive Garden is the largest brand under Darden Restaurants in terms of revenues. Almost 99% of Olive Garden restaurants are in the U.S. It serves Italian cuisine with menu items such as pastas, soups, salads, pizzas, flatbread, and desserts.

Noodles & Company (NDLS), The Cheesecake Factory (CAKE), and Brinker International’s (EAT) Maggiano’s Little Italy serve similar offerings.

Same-store sales in the U.S. were -1.3% in the first quarter ended August 24, 2014, compared to -5.2% in the corresponding quarter ended August 25, 2013. We know that menu innovation and promotion are key drivers of same-store sales as we saw in the Tim Hortons (THI) series.

The Vanguard Total Stock Market ETF (VTI) includes a few of the restaurants mentioned above, and you may consider this ETF if you’re looking for a more diversified investment in the restaurant industry.

LongHorn Steakhouse

LongHorn Steakhouse is the second largest brand under Darden’s revenue umbrella. Similar to Olive Garden, LongHorn Steakhouse’s major market is the U.S. As the name suggests, it serves steaks along with appetizers, soups, salads, seafood, chicken, ribs, burgers, side dishes, and desserts.

Its same-store sales were 2.8% in the first quarter ended August 24, 2014, compared to 3.2% in the corresponding quarter ended August 25, 2013.

Next, we’ll discuss Darden’s speciality restaurant group, which includes five brands.

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