Cyclospora fears put a damper on Olive Garden’s summer
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Same-store sales rose 1%. Photo courtesy of Olive Garden
Consumer concern over contaminated lettuce threw a wrench into Olive Garden’s plans this summer.
The Italian casual-dining chain was prepared to promote its long-standing offer of unlimited soup, salad, and breadsticks last quarter, but scrapped the plan after a massive cyclospora outbreak was linked to tainted iceberg lettuce.
Olive Garden was not implicated in the outbreak, but consumer resistance to lettuce contributed to sales challenges in the quarter nonetheless, said Raj Vennam, CFO of parent company Darden Restaurants, during an earnings call Thursday.
Olive Garden’s same-store sales rose 1% in the three-month period ended August 30. It was the chain’s lowest same-store sales result since late 2024.
Lettuce concerns and the World Cup delivered a negative hit of 150 to 200 basis points to those sales, Vennam said. Customers opting for lighter portions had a 50-basis point negative impact on mix. The chain was also lapping same-store sales growth of nearly 6% a year ago.
However, results began to improve later in the quarter as the lettuce and World Cup headwinds eased, Vennam said. The chain also launched its popular Never-Ending Pasta Bowl promotion in late August and has seen a positive response to that.
Later in the quarter, Olive Garden will revive the unlimited soup, salad, and breadsticks campaign in an effort to help drive business during weekday lunch, which Darden CEO Rick Cardenas said remains “a meaningful opportunity for the brand.”
It will also start testing a new lunch platform with a “highly competitive value proposition and includes the abundance that differentiates Olive Garden.”
Darden reaffirmed its guidance for the 2027 fiscal year, which began in June.
Overall for the quarter, same-store sales across all of Darden’s brands rose 3.2%. That included a strong 6.8% growth for LongHorn Steakhouse, 1% for fine dining, and 4.5% for the Other Business segment, which includes Cheddar’s Scratch Kitchen and Yard House.
Total revenues were $3.2 billion, including $1.3 billion for Olive Garden and $860 million for LongHorn.
Net earnings declined 9.4%, to $233.4 million.
Olive Garden finished the quarter with 20 more restaurants than a year ago for a total of 953. LongHorn finished with 29 more for a total of 624.
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