An order of breadsticks from a Darden Restaurants Inc. Olive Garden
Darden Restaurants on Thursday reported mixed quarterly results but still reiterated its outlook for fiscal 2023.
The parent company of Olive Garden and LongHorn Steakhouse said net sales for the quarter rose 6.1% to $2.45 billion, which was lighter than Wall Street’s expectations. CEO Rick Cardenas has previously said the company plans to price below rivals and limit how much of its increased costs it passes on to diners.
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During the quarter, the company’s costs for food, beverages and labor climbed, weighing on its operating profit.
Shares of the company fell 2% in premarket trading.
Here’s what the company reported for the quarter ended Aug. 28 compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:
- Earnings per share: $1.56, meeting estimates
- Revenue: $2.45 billion vs. $2.47 billion expected
In a statement, Darden said it saw seasonal changes to demand return to the business. The company’s same-store sales increased 4.2% in the quarter, boosted by the performance of its fine-dining restaurants. The segment, which includes The Capital Grille, reported same-store sales growth of 7.6%. But the company’s two largest chains saw weaker demand this quarter.
Olive Garden reported same-store sales growth of 2.3%, falling short of StreetAccount estimates of 5.4%. The chain accounted for 46% of Darden’s revenue during the quarter.
Demand for LongHorn Steakhouse also fell short of Wall Street’s 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 fiscal 2023, Darden expects earnings per share from continuing operations of $7.40 to $8. The company is assuming that inflation will rise 6% in the fiscal year. It’s projecting revenue of $10.2 billion to $10.4 billion.
Darden is also forecasting same-store sales growth of 4% to 6% and 55 to 60 new restaurant openings in fiscal 2023.
This is a breaking news story. Please check back for updates.
(With inputs from CNBC)