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The Olive Garden Is Back From The Brink

On March 20, Darden Restaurants (DRI) announced much better-than-expected quarterly earnings and the stock rose 5% in pre-market trading. Darden owns a number of full-service restaurants under the Olive Garden, LongHorn Steakhouse, Yard House, and The Capital Grille brands.

Recently, Darden was under a great deal of scrutiny from investors for its declining sales and bloated cost structure. In addition, several of Darden’s brands were suffering from a worsening public image, as consumers increasingly stated their displeasure with the quality of food. Darden ended up selling Red Lobster for $2 billion last year.

But Darden’s woes seem like a distant memory now. Total sales grew 6% last quarter. The biggest contributor was Olive Garden, which saw comparable-restaurant sales increase by 2%. Thanks largely to Olive Garden’s turnaround, Darden’s stock is up 32% in the past year.