Red Lobster’s same-restaurant sales drop

By

SeafoodSource staff

Published on
March 17, 2009

Red Lobster’s same-restaurant sales dipped 4.6 percent in the third quarter ending 22 February, Darden Restaurants reported yesterday.

The casual seafood chain’s third-quarter sales totaled USD 643 million (EUR 489.1 million), down 4.3 percent from the same period in 2008. Darden said lower food and beverage expenses at Red Lobster were offset by increased restaurant labor expenses and other expenses, resulting in a slight fall in operating profit. Operating profit as a percent of sales, however, was essentially unchanged from the previous year.

Third-quarter same-restaurant sales for Darden brands Red Lobster, Olive Garden and LongHorn Steakhouse were down 3.2 percent. Same-restaurant sales at casual-dining chains are down an average of 6.5 percent currently, according to Knapp-Track data provided by market research consultant Malcolm Knapp.

The Orlando, Fla., company posted third-quarter net earnings from continuing operations of USD 108.1 million (EUR 82.2 million), down from USD 115.6 million in 2008, while recording sales of USD 1.8 billion (EUR 1.4 billion), down slightly from USD 1.81 billion.

“We’re pleased with our sales and earnings performance this quarter given what was clearly a period of considerable macroeconomic weakness and consumer uncertainty,” said Darden Chairman and CEO Clarence Otis.

“As many consumers respond to the current environment by reducing dining out frequency, having strong brands matters more than ever,” he added. “And our competitively superior same-restaurant sales results are the clearest indication that Darden has proven brands with broad appeal and strong guest loyalty. In addition to meeting the current economic challenges, we are taking steps to further enhance our restaurant operating, brand management and support capabilities so that we emerge from this period as an even higher performing company.” 

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