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Darden Didn’t Meet Analysts’ SSSG Estimates in Q4

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Fourth-quarter performance

Darden Restaurants (DRI) reported an SSSG (same-store sales growth) of 1.6% in the fourth quarter, which was lower than analysts’ expectation of 2.3%. Among the eight brands that Darden operates, Olive Garden, LongHorn Steakhouse, The Capital Grille, and Eddie V’s reported a positive SSSG. Cheddar’s Scratch Kitchen, Yard House, Seasons 52, and Bahama Breeze’s SSSG were negative.

Olive Garden reported an SSSG of 2.4% with the average ticket size rising 2.8%. However, the guest count fell 0.4%. The company’s management blamed lower promotions for the decline in the guest count. The company added that adjusting for lower promotions, its guest count was positive. Increased menu prices contributed 1.6% to the company’s average check size, while the favorable mix contributed 1.2%.

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During the fourth quarter, Olive Garden continued to focus on flawless execution, everyday value, and growth in off-premise sales. The company maintained its all-time high guest satisfaction ratings with its flawless execution. During the quarter, the company strengthened its value offerings by refreshing its 5 for $5 value drink platform and raising awareness among customers through TV advertisements. Year-over-year, Olive Garden’s off-premise sales grew 9.0% and accounted for 15% of its total revenues.

LongHorn Steakhouse reported an SSSG of 3.3%. Increased menu prices contributed 1.8%, the favorable mix contributed 1.2%, and an increased customer count contributed 0.3%. The SSSG was driven by relevant promotions, launching a new beverage program, and investing in enhancing customers’ experience through high levels of execution.

During the fourth quarter, The Capital Grille reported an SSSG of 2.9%, while Eddie V’s posted an SSSG of 2.0%. Cheddar’s Scratch Kitchen, Yard House, Seasons 52, and Bahama Breeze’s same-store sales fell 3.2%, 1.4%, 2.1%, and 1.9%, respectively.

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