Friday, June 22, 2012
NEW YORK (AP) — Darden Restaurants Inc. is struggling to revive sales at its flagship Olive Garden and Red Lobster restaurants.
A key sales figure fell at the chains during the latest quarter, and the company issued a profit forecast that fell short of Wall Street expectations.
The Orlando, Fla.-based restaurant operator has been reworking the menu and pricing to reverse declining sales at Olive Garden, which is its biggest chain and accounts for almost half its revenue. The 10 percent rise in Darden's net income for the quarter came primarily from the opening of new locations, including those for its smaller specialty chains.
Revenue at Olive Garden restaurants open at least a year fell 1.6 percent in the quarter. At Red Lobster, the figure fell 3.9 percent. The metric is an indicator of health because it strips out the effect of newly opened and closed stores.
Darden attributed the drop at Olive Garden in part to its "Taste of Tuscany" promotion, which it said didn't emphasize value enough at a time when diners are watching their budgets and have so many more casual dining options.