Business

Darden profit falls despite new menu, ads

Florida-based Darden Restaurants Inc. owns the Red Lobster and Olive Garden chains.
Alan Diaz/Associated Press/File 2012
Florida-based Darden Restaurants Inc. owns the Red Lobster and Olive Garden chains.

ORLANDO — Darden Restaurants Inc.’s quarterly net income fell 37 percent as revamped menus and new ad campaigns failed to draw diners into its Olive Garden and Red Lobster chains.

This fall, Darden moved to update the image of its flagship chains and appeal to diners in their 20s and 30s, who increasingly prize fresh, high-quality ingredients. But many of those same diners also want cheaper prices and convenience, reflected in the rise of chains such as Chipotle Mexican Grill and Panera Bread, which offer food that’s a step up from traditional fast food for slightly higher prices.

Darden and other casual dining chains are also dealing with customers who are being more careful about where and how often they eat out.

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Darden earned $33.6 million, or 26 cents per share, for the period ended Nov. 25. That was down from $53.7 million, or 40 cents, a year earlier. Analysts predicted slightly higher earnings of 27 cents per share, according to FactSet.

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Revenue climbed 7 percent to $1.96 billion from $1.83 billion, meeting Wall Street’s forecast.

Revenue at US restaurants open at least a year, a key sales metric, fell 3.2 percent at Olive Garden and 2.7 percent at Red Lobster as traffic shrank.