(Reuters) - Darden Restaurants raised its annual sales forecast on Thursday, banking on higher menu prices and more people dining at its chains including LongHorn Steakhouse and Olive Garden in the
Darden Restaurants Increases Annual Sales Forecast for 2023
(Reuters) - Darden Restaurants raised its annual sales forecast on Thursday, banking on higher menu prices and more people dining at its chains including LongHorn Steakhouse and Olive Garden in the holiday season, sending its shares up about 9% premarket.
Restaurants chains such as Cava, Shake Shack and Chipotle Mexican have grown in popularity as runaway fast-food prices have narrowed the cost gap to casual dining chains.
Easing inflation has also prompted middle- and higher-income consumers to dine out more heading into the holiday season.
Darden's sequential price hikes, combined with steady demand and footfall, have helped the restaurant chain maintain profits, even as costs, including the prices of meat and labor, have risen.
For the full year, the company expects sales of about $12.1 billion, compared with the previous $11.8 billion to $11.9 billion forecast.
Same-store sales at the Olive Garden chain rose 2% after three consecutive quarters of decline. In the year-ago quarter, sales grew 4.1%.
LongHorn Steakhouse's same-store sales rose 7.5%, compared with a 4.9% rise a year ago.
For the second quarter, the company posted net sales of $2.89 billion, almost in line with analysts' average estimate of $2.9 billion, while adjusted profit of $2.03 per share narrowly beat estimates of $2.02 per share, according to data compiled by LSEG.
(Reporting by Neil J Kanatt in Bengaluru; Editing by Sahal Muhammed)
