Thank Goodness for Olive Garden

Fans of authentic Italian trattorias may thumb their carpaccio-sniffing noses at the thought of patronizing their local Olive Garden, but Darden Restaurants (NYSE: DRI  ) knows how to please the masses, if not the foodies.

Rising comps for Darden are as relentless as Olive Garden's endless breadsticks and salad. With a healthy 5.7% gain at the individual unit level for the most recent quarter, comps have now risen at Olive Garden for an amazing 54 consecutive quarters.

Even fallen former world-beaters such as Cheesecake Factory (Nasdaq: CAKE  ) couldn't keep their comps streaks running that long. Rare are the casual-dining and quick-service chains -- IHOP (NYSE: IHP  ) , BJ's (Nasdaq: BJRI  ) , and Chipotle (NYSE: CMG  ) among them -- that can consistently milk more out of every quarter-over-quarter comparison.

Unfortunately for Darden, though, the praise for Darden's latest quarter begins and ends with Olive Garden. Comps at the company's other concepts -- Red Lobster, LongHorn Steakhouse, Capital Grille, and Bahama Breeze -- all fell during the quarter.

Darden's revenue climbed 25% higher to $1.8 billion, but that increase was merely the result of last year's acquisition of RARE Hospitality, which brought LongHorn and the upscale Capital Grille into the Darden family.

Earnings of $0.80 a share from continuing operations, meanwhile, were essentially flat with last year's showing, even though earnings would have come in at $0.85 a share on an adjusted basis.

The company is expecting only marginal bottom-line growth in 2008, even though the top line should clock in roughly 20% higher on the steakhouse acquisition, new openings, and expectations for positive comps beyond its Olive Garden workhorse.

I'm not impressed with Darden's organic growth prospects, but I have to tip my hat to Olive Garden. Casual-dining Italian chains usually have a rough go publicly. Bertucci's cashed out. Buca (Nasdaq: BUCA  ) is now a penny stock. Even Brinker (NYSE: EAT  ) is looking to unload its Macaroni Grill concept.

As long as Olive Garden can keep the unlimited comp hikes coming to the table, Darden has a chance.

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