Darden (DRI) Issues Q3 EPS, Same Store Sales Outlook; Raises FY10 Guidance

Darden Restaurants, Inc. (NYSE: DRI) sees Q3 EPS of $0.91-$0.93, versus the consensus of $0.80.

The Company stated that it estimates Red Lobster, Olive Garden and LongHorn Steakhouse's blended U.S. same-restaurant sales for the third quarter to be approximately -0.5% to +0.5% compared to the prior year period. Fiscal third quarter U.S. same-restaurant sales are estimated to be approximately +1.0% to +1.5% at Olive Garden, -1.0% to -1.5% at Red Lobster, +0.5% to +1.0% at LongHorn Steakhouse and -2.5% to -3.0% at The Capital Grille.

Darden also announced that it expects reported diluted net earnings per share growth from continuing operations of +5.0% to +8.0% in fiscal 2010 compared to reported diluted net earnings per share from continuing operations in fiscal 2009, which were $2.65. Current earnings growth expectations for fiscal year 2010 are higher than the flat to +4.0% diluted net earnings per share growth expectation the Company provided in December in connection with the release of its fiscal second quarter results.

"The signs of sales and traffic improvement we began to see late in the second quarter and discussed during our December conference call with investors continued into January and February," said Clarence Otis, Chairman and Chief Executive Officer of Darden. "As a result, we are revising upward our outlook for same-restaurant sales and earnings per share for the fiscal year. We recognize, of course, that conditions continue to be far from normal. Still, we believe our brands are well positioned and our teams are delivering more than ever on our promises to our guests. Great brands and great people explain the tremendous loyalty we've enjoyed so far this fiscal year and are why we're confident going forward."

The Company indicated that its outlook for diluted net earnings per share from continuing operations for fiscal 2010 is based on its expectation that combined U.S. same-restaurant sales for the fiscal year for Red Lobster, Olive Garden and LongHorn Steakhouse will be approximately -3%, as well as its expectation that it will achieve new restaurant growth for the year of approximately 50 to 55 net new restaurants.

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