Olive Garden Helps Lift Profits at Darden Restaurants
Take out as well as catering orders at Olive Garden increased by 21% from September through November in comparison to the same three-month period last year.
Those figures, part of the quarterly earnings for Darden on Tuesday, helped the parent register a sales increase of 2.1%.
Same-restaurant sales for Olive Garden were higher by 2.6% in comparison to the same time last year, while a number of other restaurants suffered a drop in sales.
Darden CFO Rick Cardenas said that during the past decade, many consumers have focused on convenience and that has helped to drive Olive Garden’s takeout business.
The to-go along with catering orders represented 12.5% of the sales at Olive Garden during its fiscal year second quarter through November.
Olive Garden is part of Darden, which is based in Orlando, Florida. Darden includes other restaurants such as LongHorn Steakhouse, Yard House and Bahama Breeze.
Darden boosted its net earnings 84% to end the quarter at $79.4 million for the same three-month period through November. Revenue for the period was $1.64 billion.
Even though sales were increased at Olive Garden, its same-restaurant traffic remained flat for the just ended quarter and over the past six months is slightly down. That has in turn made catering and take out much more important.
Olive Garden added its catering delivery to other options this past January and during the just ended quarter added an option of creating your own pasta station for its catering deliveries said Gene Lee the CEO at Darden.
Lee believes that Olive Garden’s next frontier might be delivering food to customers. The restaurant is considering ways to do just that. It might work with the services of a third party like Amazon, UberEats, or it might just do the food delivery itself, said the Darden CEO.
Lee said that there was the possibility of building kitchens in warehouse districts in major cities and delivering from those.
A small increase in sales at same-restaurants was seen by LongHorn Steakhouse, but traffic decreased by 1.1%
Profits at Darden were up even though the company charged $50 million from impacts of the spin off in real estate during the end of 2015.
Net earnings during the second quarter at Darden reached 64 cents per share.