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Financing

Olive Garden owner’s record sales overshadowed by omicron

A historic December gave way to a difficult January for Darden Restaurants, but it had bounced back again by February.
Olive Garden exterior
Photograph: Shutterstock

The holiday season at Darden Restaurants was a study in contrasts.

The owner of Olive Garden, LongHorn Steakhouse and other casual brands posted record sales in December, CEO Gene Lee said Thursday morning. But by the next month, the omicron wave had taken the wind out of its sails, impacting demand, staffing and operating expenses.

More than 13,000 Darden workers, or about 8% of its workforce, were excluded at some point in January, said COO Rick Cardenas. The impacts of omicron combined with bad weather had a $100 million negative impact on sales for the month, said CFO Raj Vennam.

“This was a quarter of stark contrasts and I'm pleased with our performance in this highly volatile environment,” Lee said.

As a result of the difficult January, same-store sales decreased at Olive Garden on a two-year basis for the quarter ended Feb. 27, though the company did not reveal exact figures on an earnings call Thursday morning. 

Vennam said the 881-unit Italian chain is more sensitive to the dynamics of COVID-19 because of its geographic footprint and guest demographics. It’s also doing fewer promotions than two years ago, making pre-COVID comparisons more difficult.

Same-store sales at Darden’s seven other brands were positive in the quarter compared to two years ago, Vennam said.

Compared to last year, same-store sales rose 29.9% at Olive Garden and 31.6% at LongHorn Steakhouse, according to an earnings report filed Thursday. Darden’s fine-dining restaurants, The Capital Grille and Eddie V’s, continued to do well, with sales up 85.8% compared to a year ago.

On a two-year basis, total sales across the company’s eight brands rose about 4%, from $2.3 billion to $2.4 billion, but on a larger base of restaurants. The growth came mostly from brands not named Olive Garden. Total sales at the chain were about $27 million short of their pre-pandemic numbers in the quarter.

Sales had strengthened again by February, Lee said, and year-to-date sales totals were higher than 2020 across all of its brands.

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