Darden Restaurants has found its next big thing in LongHorn Steakhouse.
After a couple of years of slow growth during the economic downturn and adjustment to a new corporate owner, the Western-themed chain is taking off, with annual sales expected to hit $1 billion for the first time this year.
Orlando-based Darden, which also owns Olive Garden and Red Lobster, bought LongHorn and Capital Grille for $1.4 billion in 2007.
Darden this year is accelerating the pace of expansion with plans to dot the country with LongHorns, eventually reaching 600 to 800.
With 356 restaurants so far, "LongHorn still has this long runway of growth available to it," said Dave George, president of the chain. There are locations in Wisconsin and Iowa, but not Minnesota.
There's still some room for new restaurants in older markets. Yet, much of LongHorn's emphasis is on the new frontier and introducing a more sophisticated look and brand.
As it grows, LongHorn will have to wrangle with some tough competition. Unlike Olive Garden and Red Lobster, the country's biggest Italian and seafood chains, LongHorn is No. 3 in steak. It generated about 7 percent of U.S. steak sales last year, behind Outback Steakhouse and Texas Roadhouse, according to research firm Technomic.
LongHorn also will face heavy competition as it moves into Western states, where "there's a lot of steak," said Steve West, an analyst with financial services firm Stifel Nicolaus.
