Darden CEO: Millennials still enjoy chains like Olive Garden

AP News
Posted: Jun 27, 2017 2:52 PM
Darden CEO: Millennials still enjoy chains like Olive Garden

NEW YORK (AP) — Millennials may be shunning some habits beloved by past generations, but one restaurant company CEO says they still want to go to sit-down chains like Olive Garden.

"Believe it or not, millennials still want to come to restaurants," Gene Lee, chief executive of Olive Garden's parent company Darden Restaurants, said Tuesday, based on what he said was the company's research.

"I know you don't think millennials go to casual dining restaurants, but 30 percent of all of our guests are millennials versus 24 percent of the population," Lee told Wall Street analysts. He said that the company's flagship Olive Garden and its recently acquired Cheddar's chain both "over index" with millennials.

Darden reported a better-than-expected quarterly profit, with higher sales at Olive Garden. That's even though casual dining sector has struggled in recent years amid the proliferation of "fast casual" places, or those that market restaurant-quality at prices closer to fast food.

For the quarter ended May 28, Darden said Olive Garden's sales rose 4.4 percent at established locations. Its other chains including LongHorn Steakhouse and The Capital Grille also saw increases.

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Profit fell 11.3 percent to $123.8 million, or 98 cents per share, mainly on higher costs. Earnings, adjusted for non-recurring items came to $1.18 per share. That was 3 cents better than Wall Street expected, according to a survey by Zacks Investment Research.

Total revenue rose 8 percent to $1.93 billion, also edging out analyst projections.

Shares of Darden Restaurants Inc. rose about 3 percent to $92.82.