At least two American restaurant chains appear to be bucking the trendline when it comes to sales numbers and brand loyalty, as CNN reported.
Olive Garden saw same-store sales increase by 2% year-over-year (YoY), while Longhorn Steakhouse outperformed significantly, seeing same-store sales tick upward by 7.5% YoY.
While both of the aforementioned chains share the same parent company, Darden Restaurants, its upscale holdings didn’t fare quite as well. Darden’s fine dining chains, including Ruth’s Chris Steak House and The Capital Grille, saw a dip of nearly 6% in contrast as cash-strapped customers opted for more affordable — yet still appealing — options.
Olive Garden’s ‘Never-Ending Pasta Bowl’ and Longhorn Steakhouse’s Affordable Beef Joined by Uber Partnership
CNN attributed the success of these two Darden brands to a variety of factors: LongHorn Steakhouse’s less expensive yet still tasty steak offerings; Olive Garden bringing back its famous Never-Ending Pasta Bowl promo earlier this year and running it for longer; and an ongoing trial partnership with Uber to increase delivery orders.
Furthermore, Darden CEO Rick Cardena gestured toward an overall rosier picture as concerned consumer finances to close out the year and move into 2025.
“It looks like the consumer is starting to feel a little bit better than they were in prior quarters,” Cardena said on an earnings call, per Bloomberg. He pointed out that those earning between $50,000 and $100,000 are visiting the company’s restaurants more often, while those earning less than $150,00 are seemingly hesitant to dine out — a scenario which is perhaps responsible for the downturn of Darden’s fine-dining brands.
Darden Stock Soars After Bright Earnings Report
Given the strong success of Olive Garden and LongHorn Steakhouse over the past quarter, as well as the promising October acquisition of Chuy’s, as Bloomberg pointed out, Darden stock soared.
On Dec. 19, the stock rose by as much as 18% to $188.82, up from $159.87 at market close yesterday. Shares had been down 2.7% year-to-date (YTD), but today’s surge has brought the stock to an increase of 13.3% YTD.
The news comes as other competitors in the fast-casual and traditional dining sector struggle with declining revenue and store closures, including TGI Fridays and Red Lobster.
