When the takeout is Olive Garden, but the drinks are BYO
Short end of the breadstick... Olive Garden parent Darden Restaurants got it on earnings. In addition to the unlimited breadstick icon, Darden parents eight other restaurant chains, including Capital Grille and LongHorn Steakhouse. All its kids disappointed this quarter.
Blame the booze... During lockdowns, 99% of Olive Gardens were open for curbside pickup. Takeout sales soared 142%, and 3X'd at LongHorn (Darden doesn't deliver). But that wasn't enough to make up for all the lost booze bucks.
Big chains can survive and come back stronger... Darden stock jumped because it survived — 91% of its dining rooms are now open and it expects earnings will be positive again by 1st quarter 2021. Plus, it still has $750M in cash to weather slowdowns. Smaller biz isn't so lucky: 53% of restaurants that closed during the pandemic said they won't reopen. That wipes out a lot of Darden's competition.