EAT Brinker International Inc

Darden Restaurants Inc. (DRI) hopes promoting distinctive menu offerings, like Red Lobster's recent Crabfest run, at its restaurants rather than price-focused deals offered at other chains can keep sales trending better than its casual-dining peers.

Darden, which also owns Olive Garden, LongHorn Steakhouse and other restaurant chains, reports its fiscal first-quarter earnings Tuesday after the market's close. Analysts expect Darden to post per-share earnings of 77 cents, up 15% from a year ago, on $1.82 billion in sales, according to Thomson Reuters estimates.

Investors will also hope to see continued signs that same-store sales at Darden's three largest brands can continue to outperform Knapp-Track, a survey of sales at 11,000 casual-dining restaurants.

The expectations come as full-service restaurants show more signs of improvement, albeit slowly. Same-store sales edged up 0.6% in August at casual-dining restaurants, Malcolm Knapp, proprietor of the survey, said Monday, following a 0.9% increase in July, marking the first consecutive months of increases since mid-2007.

"We're muddling toward better," Knapp said.

Darden, which didn't immediately return a call for comment, has held firm to avoiding deep discounts to attract customers, instead opting to offer value that incorporates the distinctive features of its restaurant chains. So while fellow casual-dining giant Brinker International Inc. (EAT) offers two meals for $20 at Chili's Grill & Bar, Darden plugged Crabfest at Red Lobster with entrees starting at $14.99.

Morgan Keegan restaurant analyst Bob Derrington said promotions like Crabfest, which Red Lobster ran in its latest quarter for the first time in seven years, illustrate the types of promotions Darden can launch that don't rely on discounts.

"If you have to use the price as a selling point, you're fighting an uphill battle," said Derrington. "Darden doesn't want to operate brands that are just one of many."

Darden is forecasting that it's same-store sales will grow between 2% and 3% at its three main brands this fiscal year, after two straight years of declines. While sales may see volatility from quarter to quarter, Darden's profits could be buffered by favorable commodity costs at least through the first half of the fiscal year, Derrington said.

Darden shares were recently trading up 39 cents, or 0.9%, at $45.12. They have risen more than 28% so far this year, well outpacing gains of 3% for the Dow Jones Industrial Average and 2.3% for the S&P 500 Index.

Other casual-dining chains have also posted solid gains this year. Brinker's shares, recently off 0.6% at $17.54, are up 18% this year, and Cheesecake Factory Inc. (CAKE) shares, recently up 2.5% at $26.38, are up 22% year-to-date.

-By Paul Ziobro, Dow Jones Newswires; 212-416-2194; paul.ziobro@dowjones.com

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