Folks are consistently craving for LongHorn Steakhouse and Olive Garden experiences.
Darden Corporation, the company behind Olive Garden and LongHorn Steakhouse, saw better sales than predicted at these establishments, leading to a 9% increase in their stock price in the pre-market trading on Thursday.
LongHorn Steakhouse managed to maintain its momentum, showing a same-store sales growth of 7.5%, surpassing the other chains under Darden's umbrella. The budget-friendly steakhouse chain has been thriving this year, thanks to maintaining lower prices and attracting cost-conscious consumers.
Olive Garden, Darden's largest revenue-generating chain, also saw a boost with a 2% increase in same-store sales, surpassing analyst predictions. The Italian chain benefited from launching its "Never Ending Pasta Bowl" campaign earlier than usual and adding an extra four weeks. It's also experimenting with a delivery partnership trial with Uber.
Darden's upscale dining chains, like The Capital Grille and Ruth's Chris Steak House, were not as successful. Sales in the luxury dining segment dropped by almost 6%, suggesting that consumers are still cautious with their spending and preferring more economical options.
However, Darden remained optimistic and increased its full-year sales forecast, suggesting that diners are returning to restaurants. The fast-casual segment has faced challenges due to lower consumer spending and persistent inflation, leading some chains like TGI Fridays and Red Lobster to either declare bankruptcy or reconsider their menus.
On the positive side, Chili's has seen success with smart marketing and improved food quality. Shares of its parent company, Brinker International, have skyrocketed by more than 200% this year, benefiting from Chili's' popular Southwestern-inspired menu.
Darden's strategy of offering affordable options at LongHorn Steakhouse has significantly contributed to its food sales, as evidenced by the 7.5% same-store sales growth. The company's Italian chain, Olive Garden, also reported a 2% increase in same-store sales, partly due to their successful "Never Ending Pasta Bowl" campaign and delivery partnership trial with Uber.
