Ordering Bars from Darden Restaurants Inc. Olive Garden
Darden Restaurant reported mixed quarterly results on Thursday but still reiterated its outlook for fiscal 2023.
The parent company of Olive Garden and LongHorn Steakhouse reported net sales for the quarter rose 6.1% to $2.45 billion, which was less than Wall Street expected. CEO Rick Cardenas previously said the company plans to cut prices below competitors and limit how much of its increased costs it passes on to diners.
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During the quarter, the company’s food, beverage and labor costs increased, affecting its operating profit.
The company’s shares fell 2% in premarket trading.
Here’s what the company reported for the quarter ended Aug. 28 compared with Wall Street expectations, according to a survey of analysts by Refinitiv:
- Earnings per share: $1.56, in line with estimates
- Revenue: $2.45 billion vs. an expected $2.47 billion
In a statement, Darden said it had experienced seasonal changes that required a return to business. The company’s same-store sales rose 4.2% in the quarter, helped by the performance of its fine-dining restaurants. The segment, which includes The Capital Grille, reported same-store sales growth of 7.6%. However, the company’s two largest chains saw weaker demand this quarter.
Olive Garden reported same-store sales growth of 2.3%, missing StreetAccount estimates of 5.4%. The chain accounted for 46% of Darden’s sales during the quarter.
Demand for LongHorn Steakhouse also fell short of Wall Street expectations. The chain reported same-store sales growth of 4.2%, missing estimates of 5.1%.
Net income for the period was $193 million, or $1.56 per share, down from $230.9 million, or $1.75 per share, a year earlier.
For its 2023 fiscal year, Darden expects earnings per share from continuing operations of $7.40 to $8. The company expects inflation to rise by 6% in the fiscal year. It expects sales of $10.2 billion to $10.4 billion.
Darden also forecasts same-store sales growth of 4% to 6% and 55 to 60 new restaurant openings in fiscal 2023.
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