The company has been on an amazing roll as it relates to outperforming analysts' earnings estimates. In fact, its last EPS miss came way back in 4Q15. Also, its sales growth has improved over the past couple of years, ranging in the mid-single-digits to low teens, from the low-single-digit range it commonly achieved back in 2014-2016.
There are a few main drivers behind DRI's enhanced performance. First, its Olive Garden chain -- which accounts for over half of DRI's total business -- has experienced a major revival. It has strung together 17 straight quarters of positive same store sales growth, including this quarter's healthy +4.3% mark, which followed strong growth of +4.9% in Q2.
The revival at Olive Garden has been the result of a few key changes and initiatives. For instance, in 3Q18, DRI shook up its management team, bringing on Dan Kiernan as the new President of Olive Garden, who has clearly executed well in that role. More broadly speaking, the company has taken a "simpler is better" approach to its operations, focusing on high guest satisfaction by providing everyday value on its menu -- including its successful never-ending pasta offering.
Additionally, DRI has remodeled some of its Olive Garden restaurants and has done a better job supporting its menu innovations through marketing. Its off-premise/e-commerce channel has also been growing nicely, up 10.3% this quarter, accounting for nearly 15% of total revenue. The end result has been continued outperformance versus the full-service restaurant industry, leading to share gains. On that note, DRI's combined sale restaurant sales growth was 2.8% this quarter, compared to 1.2% for the overall industry.
In addition to the impressive results at Olive Garden, DRI has done a very good job managing costs, especially in the face of rising labor expenses. Other names in the full-service space -- like Cheesecake Factory (CAKE) -- have really struggled to reign in rising labor costs, which have impacted margins. While DRI has also seen its labor costs rise, up 3.5% in Q3, it has mitigated the pressure through improved sales leverage and productivity gains.
As its brands continue to resonate with customers, DRI has pulled back on incentives, which has boosted average check size and margins. More specifically, check average was up 4.3% this quarter, driven by 1.9% bump in pricing and a 2.4% lift from menu-mix. DRI continues to have a good handle on food and beverage costs, which were favorable by 40 bps in Q3. As a result of the higher average check size and dip in food and beverage costs, its operating margin improved to 11.8% from 11.0% in the year ago period.
The better-than-expected Q3 performance allowed DRI to up its FY19 guidance to EPS of $5.76-$5.80, from its prior expectation of $5.60-$5.70, ahead of the $5.70 consensus. It now sees revenue growth of 5.5% versus its former 5.0-5.5% estimate, with comp growth of 2.5-2.7%.