Olive Garden's Parent Company Just Bought Ruth's Chris Steak House
Olive Garden, the Italian-American chain best known for its variety of pasta dishes and limitless breadsticks, has a reputation for offering a family-style dining experience. (The chain was synonymous with the slogan "When You're Here, You're Family" for years.) In addition to Olive Garden, its parent company, Darden Restaurants, boasts a wide selection of other hospitality brands, including Eddie V's, The Capital Grille, Longhorn Steakhouse, and more. The company can now add one more big name to its roster, thanks to its impending acquisition of Ruth's Chris Steak House, as CNBC reports.
The steakhouse chain got its start in 1965 when Ruth Fertel purchased a New Orleans-based restaurant called Chris Steak House. Per the terms of the sales contract, Fertel was not permitted to use the name of the steakhouse at additional restaurants. To ensure brand recognition, she christened these new locations with the name Ruth's Chris Steak House, and the rest is history. (Well, at least until this recent development.)
A lucrative deal in the making
On May 3, Darden Restaurants announced its plans to purchase Ruth's Hospitality Group, the parent company of Ruth's Chris Steak House. The deal cost Darden $715 million, but the company is hoping the investment pays off based on the steakhouse chain's success. In 2022, the establishment earned $505.9 million in sales at more than 150 locations around the world. Additionally, shares of the steakhouse are valued at $21.50 each.
Darden's fine-dining establishments have been faring well during the recent financial quarter. For instance, the company experienced an 11.7% increase in same-store sales (a metric that focuses on the growth of a company's existing stores, as opposed to expanded establishments).
Prior to the acquisition, Darden purchased Cheddar's Scratch Kitchen for $780 million in 2017. Some have speculated that the extended period between acquisitions has something to do with elevated interest rates, which makes acquiring new establishments less attractive. However, it bears consideration that Darden's deal has not been closed yet. The closing date is scheduled for June, provided that the conditions laid out in the contract are met sufficiently.