UPDATE: How a $1 price hike scared Olive Garden customers away
By Tonya Garcia, MarketWatch
Shares are down nearly 6% after Hurricane Harvey and a price hike hurt results
Olive Garden parent Darden Restaurants Inc. says traffic suffered after the chain raised the price on a popular meal deal during the fiscal first quarter.
Darden (DRI) reported a year-over-year sales increase to $1.94 billion from $1.71 billion in 2016. Adjusted earnings per share were 99 cents. Both results were in line with the FactSet consensus for sales of $1.93 billion and EPS of 99 cents.
Same-store sales for the "legacy" Darden brands were up 1.7%, but below the FactSet consensus for a 2.1% rise. Olive Garden's 1.9% same-store sales increase was also below the 2.5% FactSet estimate.
Other Darden chains include LongHorn Steakhouse, which reported a 2.6% same-store increase, and the Capitale Grille, which saw same-store sales increase of 2%.
Same-store sales for Cheddar's Scratch Kitchen, which Darden acquired earlier this year (http://www.marketwatch.com/story/olive-garden-owner-buys-cheddars-chain-for-780m-2017-03-27), were down 1.4%.
Shares closed down 6.6% on Tuesday, but are up 2.7% in Wednesday trading.