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What Drove Darden’s Revenue in Q3 2019?

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Mar. 22 2019, Published 7:55 a.m. ET

Third-quarter revenue

In the third quarter of fiscal 2018, Darden Restaurants (DRI) posted revenue of $2.25 billion, outperforming analysts’ revenue expectation of $2.24 billion. 

Year-over-year, the company’s revenue rose 5.5% driven by positive SSSG (same-store sales growth) of 2.8% and the net addition of 39 restaurants.

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Performance across segments

In the quarter, Olive Garden posted revenue of $1.13 billion, a rise of 5.3% from $1.07 billion in the corresponding quarter of fiscal 2018. This revenue growth was driven by positive SSSG of 4.3% and the net addition of seven restaurants in the last four quarters.

In the quarter, LongHorn Steakhouse posted revenue of $483.2 million, a rise of 6.7% from $452.8 million. Its SSSG of 3.8% and its net addition of 13 restaurants drove its revenue in the period.

The revenue from the company’s Fine Dining segment included sales from the Capital Grille and Eddie V’s. In the quarter, the segment’s revenue rose 6.1% to $174.5 million. Positive SSSG at both brands and the opening of one new restaurant for each drove the segment’s revenue.

The revenue from the Others segment rose 4.7% to $458.6 million. The net addition of five Cheddar’s Scratch Kitchen restaurants, seven Yard House restaurants, three Bahama Breeze restaurants, and two Seasons 52 restaurants in the last four quarters drove the segment’s revenue, which was partially offset by negative SSSG in all four brands.

Peer comparison

During the comparable quarter, Texas Roadhouse (TXRH), Brinker International (EAT), and Bloomin’ Brands (BLMN) posted revenue growth of 11.2%, 3.2%, and -6.9%, respectively.

Next, we’ll look at Darden’s SSSG in the third quarter of fiscal 2019.

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