Olive Garden's parent company topped fourth-quarter sales expectations, providing a ray of hope for the beleaguered casual dining sector.
Darden Restaurants, whose brands also include LongHorn Steakhouse and The Capital Grille, notched revenue gains for the quarter and the full fiscal year ended May 28.
The company's sales from continuing operations rose 8.1% to $1.93 billion.
Sales at restaurants open at least a year rose 3.3%, beating S&P Global Market Intelligence expectations of 2.3%.
The performance reflected an encouraging uptick for a sector that's ailing, undermined by low grocery prices and high labor costs.
Olive Garden, the company's largest brand, led the way with a 4.4% same-store sales increase for the quarter. LongHorn Steakhouse was up 3.5%.
"Our strong fourth-quarter results wrapped up a solid year of performance," CEO Gene Lee said in a statement. "We continue to improve execution in our restaurants by relentlessly focusing on food, service and atmosphere. Our strategy is helping to build guest loyalty, drive improved financial results and grow shareholder value."
Encouraged investors drove Darden shares up 2.1% in pre-market trading to $90.08.
In one negative sign, net earnings declined 11.3% to $123.8 million for the period.
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