Inflation bites into profits at Olive Garden restaurants – Orlando Sentinel

Orlando-based Darden Restaurant sales rose 9.4% to $2.49 billion in the quarter ending Nov. 27, while Olive Garden chain profits fell on high inflation. , a company official said on Friday.

Olive Garden sales were $1.176 billion in the quarter, up from $1.077 billion in the year-ago quarter, while chain profit was $218.9 million, down from $235.1 million last year. decreased, the company’s earnings report shows.

olive garden Darden CFO Raj Bennam said on Friday morning’s earnings call that the company has endured about 20% inflation in commodities during the fourth quarter. He said the price increase in Olive Garden was closer to the roughly 6.5% seen across Darden.

“If you think about the three items I mentioned…the ones that had the highest inflation in the quarter were chicken, dairy and wheat. That’s Olive Garden for you.

Darden hasn’t seen much backlash from customers for its high prices, which are well below the rest of the industry, Vennam said.

Eating out was 8.5% higher than a year earlier in November, and full-service dining was 9% higher, according to the federal consumer price index.

Earnings at Longhorn Steakhouse increased to $85.6 million from $83.6 million last year, while Darden’s fine dining brand fell to $38.9 million from $39.7 million. Profits from other brands fell to $59 million from his $62.3 million last year.

The company has 1,887 restaurants, with Olive Garden leading the way with 890. Darden also owns Longhorn Steakhouse, Cheddar’s Scratch Kitchen, Yard House, The Capital Grill, Seasons 52, Bahama Breeze, Eddie V’s and The Capital Burger.

Darden shares fell nearly 4.3% to $136.74 around noon Friday.

Other parts of the earnings report were positive. Same-store sales for the quarter he increased 7.3%.

Darden CEO Rick Cardenas also said last week that for the first time in the company’s history, sales exceeded $10 billion in 52 weeks.

The revival of Olive Garden’s Neverending Pasta Bowl promotion was also seen as a success after it was last done in 2019.

“The price is $3 higher than in 2019, which has significantly improved the margins on this offer, but still provides a great deal of value to our guests,” said Cardenas. “The Neverending Pasta Bowl exceeded expectations.”

The Capital Grille, Eddie V’s and Seasons 52 also set all-time daily sales records on Thanksgiving Day, Cardenas said.

“Booking this holiday season is encouraging,” he said.

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