Darden credit rating upgraded
Feb. 8, 2011
by Josh Sosland
NEW YORK — Moody’s Investor Service has upgraded the credit ratings of Darden Restaurants, Inc., including the senior unsecured rating to Baa2 from Baa3. Darden’s short-term commercial paper rating was improved to Prime-2 from Prime-3.
Moody’s placed Darden’s outlook as stable.
Explaining the upgrade, Moody’s cited better same store sales at the Olive Garden and LongHorn Steakhouse chains and an expectation that the improvement will continue.
“We also believe that stronger operating metrics coupled with ongoing cost saving initiatives and new product innovations will help sustain strong debt protection metrics and maintain a strong brand image,” said Bill Fahy, senior analyst at Moody's.
“The upgrade also reflects our view that liquidity will remain good and that the company's financial policies will be managed in a way that maintains a strong credit profile.”
Darden holds a strong position in the casual dining industry with six separate concepts — Red Lobster, Olive Garden, LongHorn Steakhouse, The Capital Grille, Bahama Breeze and Seasons 52. The company has annual revenues of about $7.3 billion.