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Q3 sales rose at Olive Garden. It's in the breadsticks

Olive Garden's parent company, Darden, got a big boost from the Italian family-style chain.

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    The sign outside the Olive Garden restaurant is seen in Westminster, Colorado (March 19, 2015).
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NEW YORK (AP) — The man who spearheaded a board coup at Darden has stepped down after a surprisingly strong quarter at the restaurant chain topped a sustained rebound for the company.

And it was Olive Garden, the primary source of ire for Jeffrey Smith and Starboard Value LP, which lead the way.

Smith, who heads Starboard, was named chair at Darden in late 2014 after the activist investor ousted the company's entire board in a high-profile fight for control.

Before taking over the board, Starboard released a 294-page presentation outlining what it thought Darden's management was doing wrong.

Since that revolt, shares of Darden have risen more than 30 percent.

"I will thoroughly miss working with the capable and talented people throughout the company and I am so incredibly proud of what we have been able to accomplish together," Smith said in a company release. "I am able to move on to other projects at this time because of the outstanding chemistry and capabilities of both the board and management."

Starboard's criticisms of Darden's path were unique in that, for an activist investor, they were extraordinarily granular.

It took issue with everything from the number of breadsticks brought to diners, to the way pasta was cooked.

"How does the largest Italian dining concept in the world not salt the water for pasta?" it asked at the time, citing one cookbook passage that "... it's simple: the water should be salty, Atlantic Ocean salty ..."

Olive Garden and other restaurants owned by Darden benefited from a rebounding U.S. economy as well.

Third-quarter sales at Olive Garden restaurants rose 6.6 percent to about $1.02 billion while sales at LongHorn Steakhouse restaurants rose 5.4 percent to $425 million. Sales at fine dining operations rose 5.4 percent to $146 million and sales at other businesses rose 10.7 percent to $256.2 million.

Darden Restaurants Inc., based in Orlando, Florida, earned $105.9 million, or 82 cents per share, marking a 21 percent drop from a year prior, mainly because of higher costs. Earnings, adjusted for non-recurring costs and to account for discontinued operations, came to $1.21 per share.

That was a penny better than Wall Street had expected, according to a survey by Zacks Investment Research.

Revenue jumped 6.7 percent to $1.85 billion, also edging out analyst projections.

Same-store sales, a key measure of health for retailers, rose 6.2 percent companywide.

Darden expects full-year earnings in the range of $3.48 to $3.52 per share. Analysts had been projecting annual earnings of $3.48.

The board named current director Charles M. Sonsteby as chairman. With Smith's departure, the company now has 10 directors.

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Elements of this story were generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on DRI at http://www.zacks.com/ap/DRI

Copyright 2016 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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