The ratings on Darden reflect Standard&Poor's Ratings Services' view of its business risk profile as "satisfactory" and its financial risk profile as "intermediate." Darden's business profile reflects its good position in the casual-dining industry, geographic and concept diversity, and its leading market share in the very fragmented casual-dining industry. Although we generally believe there is overcapacity in the restaurant industry, we think that Darden's concepts, including its core operations like Olive Garden and Red Lobster, are capable of further modest growth, given their relative good value proposition with customers. Still, sales growth moderated in recent quarters, primarily because of flat to slightly negative same-store sales at its major brands, reflecting ongoing intense competition and continuing weak consumer sentiment.
