Olive Garden parent Darden Restaurants raises annual sales forecast
Dec 19 (Reuters) -Darden Restaurants DRI.N raised its annual sales forecast on Thursday, banking onhigher menu prices and more people diningat its chains including LongHorn Steakhouse and Olive Garden in the holiday season, sending its shares up about 9% premarket.
Restaurants chains suchas Cava CAVA.N, Shake Shack SHAK.N and Chipotle Mexican CMG.N have grown in popularity as runaway fast-food prices havenarrowed the costgap 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, havehelped the restaurant chain maintain profits, even as costs, including the prices of meat and labor, have risen.
For thefull year, the company expects sales of about $12.1 billion, compared withthe 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, salesgrew 4.1%.
LongHorn Steakhouse's same-store salesrose 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
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