Darden Restaurants Inc. Beats Earnings Expectations, Raises Guidance
In a positive turn of events, Darden Restaurants Inc., the parent company of Olive Garden and LongHorn Steakhouse, reported quarterly earnings that beat expectations and raised its annual guidance. The news comes as a welcome surprise following the company’s schedule to release earnings figures on September 21.
For the fiscal second quarter ending Nov. 26, Darden reported earnings per share of $1.84 adjusted, surpassing the $1.74 expected by Wall Street analysts. However, revenue came in slightly lower than anticipated at $2.73 billion, compared to the expected $2.74 billion.
The sales growth was a major driver for the positive earnings report, with a 9.7% increase from the year-ago period. This growth was attributed to the inclusion of Ruth’s Chris Steak House locations and a 2.8% increase in same-restaurant sales. Olive Garden and LongHorn Steakhouse saw particularly strong performances, with same-restaurant sales up 4.1% and 4.9% respectively, while fine dining sales lagged with a 1.7% decrease.
Despite the positive report, Darden shares were down more than 1% in premarket trading on Friday morning.
Darden completed its acquisition of Ruth’s Hospitality Group in June, and although same-store sales from Ruth’s Chris Steak House are not yet included in the report, the company expressed optimism about the future prospects.
In a statement, Darden President & CEO Rick Cardenas said, “We continued to profitably grow market share again this quarter as we outperformed industry same-restaurant sales and traffic.”
The restaurant group also updated its fiscal year 2024 outlook, now forecasting adjusted earnings per share of $8.75 to $8.90, up from the previous estimate of $8.55 to $8.85. Additionally, Darden expects $11.5 billion in sales for the fiscal year, reflecting a positive outlook for the company’s future performance.