A sign hangs in front of the Olive Garden restaurant on June 22, 2023 in Chicago, Illinois.
Scott Olson | Getty Images
Darden Restaurant Quarterly profit and revenue reported Thursday were in line with analysts’ expectations, and same-store sales growth at Olive Garden and Longhorn Steakhouses beat expectations.
The company’s shares rose 8% in premarket trading.
The company’s report compared with Wall Street expectations, according to a survey of analysts by London Stock Exchange Group (LSEG):
- Earnings per share: Adjusted $2.03, $2.02 expected
- Revenue: $2.89 billion, $2.9 billion expected
Darden reported fiscal second-quarter net income of $215.1 million, or $1.82 a share, up from $212.1 million, or $1.76 a share, a year earlier.
Excluding costs related to the Chuy’s acquisition, the restaurant company earned $2.03 per share.
Net sales grew 6% to $2.89 billion.
Darden’s same-store sales grew 2.4%, exceeding StreetAccount’s forecast of 1.5%.
LongHorn Steakhouse reported same-store sales growth of 7.5%. The casual-dining chain has been the top performer in Darden’s portfolio in recent years, winning over customers with its food quality and price. Wall Street expects the chain’s same-store sales to grow 4.1%.
Olive Garden accounted for more than 40% of Darden’s quarterly revenue, and same-store sales grew 2% in the quarter. Analysts expect same-store sales to grow 1.4%, according to StreetAccount.
Darden’s fine-dining division, which includes The Capital Grille and Ruth’s Chris Steak House, reported a 5.8% same-store sales decline, sharper than analysts’ expectations for a 2.8% decline. Higher prices at fine dining chains have scared away many consumers trying to spend less at restaurants.
The company’s last remaining segment, which includes Cheddar’s Scratch Kitchen and Yard House, saw same-store sales rise 0.7%, in line with expectations.
Darden added a net 39 new stores and 103 Chuy’s restaurants this quarter. Darden completed a $605 million acquisition of the Tex-Mex chain in October.
The company updated its fiscal 2025 outlook to include Chuy’s results, although the chain won’t include its same-store sales metrics until the fiscal fourth quarter of 2026. of an estimated US$11.8 billion to US$11.9 billion. Darden reiterated its forecast for earnings per share from continuing operations of $9.40 to $9.60.
About The Author
