(RTTNews) - Tuesday, restaurant chain operator Darden Restaurants, Inc. (DRI: News ) said its first quarter profit increased, notwithstanding a 2.3% decline in sales. Earnings came in ahead of the Street estimates by a cent, though revenues fell short. Looking ahead, the company reaffirmed its financial guidance for fiscal year 2010.

The Orlando, Florida-based company reported net income for the first quarter of $94.3 million or $0.67 per share, compared to $82.1 million or $0.58 per share in the year-ago quarter.

Income from continuing operations for the first quarter was $95.0 million or $0.67 per share, compared to $82.4 million or $0.58 per share in the same quarter last year.

On average, twenty three analysts polled by Thomson Reuters expected the company to earn $0.66 per share for the quarter. Analysts' estimates typically exclude special items.

Sales for the quarter decreased 2.3% to $1.73 billion from $1.77 billion in the prior-year quarter. Twenty two analysts had a revenue consensus of $1.78 billion for the first quarter.

Combined same-restaurant sales for Olive Garden, Red Lobster and LongHorn Steakhouse were down 5.3% this quarter. U.S. same-restaurant sales decreased 2.9% at Olive Garden, 7.9% at Red Lobster and 6.2% LongHorn Steakhouse.

Commenting on the results, Clarence Otis, chairman and chief executive officer said, "We are pleased to report solid earnings growth for the quarter in such a difficult macro-economic environment. Despite the challenges, our brands once again posted meaningfully stronger sales results than our industry as measured by the Knapp-Track benchmark."
Segment wise, Olive Garden's quarterly sales rose 1.2% to $821 million from prior year driven by revenue from 33 net new restaurants, partially offset by a U.S. same-restaurant sales decline of 2.9%.

Red Lobster fourth quarter sales were $605 million, a decrease of 6.3% , due to a 7.9% decline in U.S. same-restaurant sales, partially offset by revenue from 11 net new restaurants.

Longhorn Steakhouse quarterly sales decreased 2.0% to $211 million because of a same-restaurant sales decrease of 6.2%, partially offset by revenue from 14 net new restaurants.

Capital Grille fourth quarter sales of $50 million were 8.4% below last year sales, with same-restaurant sales slipping 18.0% year-over-year, and partially offset by the addition of five net new restaurants.

Bahama Breeze's first quarter sales of $35 million were 1.5% below prior year, driven by a same-restaurant sales decrease of 6.3%, partially offset by the addition of one net new restaurant.

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