A sign hangs on the front of an Olive Garden restaurant in Chicago, Illinois on June 22, 2023.
Scott Olsen |
Restaurants Darden reported weaker-than-expected quarterly earnings and revenue on Thursday, as sales at Olive Garden and its fine-dining restaurants fell.
“While we fell short of our expectations in the first quarter, I firmly believe in the strength of our business,” CEO Rick Cardenas said in a statement. “I am confident in the actions all of our brand teams are taking to meet the needs of their guests and will not compromise the long-term health of our business for short-term gains.”
Despite the results, the company's shares rose about 10% in premarket trading.
Here's what the company reported for the quarter ended August 25, compared to Wall Street expectations, based on an analyst survey conducted by LSEG:
- Earnings per share: $1.75 adjusted versus $1.83 expected
- Revenue: $2.76 billion versus expected $2.8 billion
Darden reported net income of $207.2 million, or $1.74 per share, for the fiscal first quarter, up from $194.5 million, or $1.59 per share, a year earlier.
Excluding the cost of buying Tex-Mex chain Chuy's, the restaurant company earned $1.75 per share.
Net sales rose 1% to $2.76 billion, but the company's comparable-store sales fell 1.1% in the quarter. Customer traffic at restaurants fell sharply in July but then rebounded, said CFO Raj Vennam.
Olive Garden's sales fell 2.9% in the quarter. In hopes of winning back customers, the chain is relaunching its Never Ending Pasta Bowl later this month.
Darden's Gourmet segment, which includes Eddie V's and The Capital Grille, reported a 6% decline in comparable-store sales.
LongHorn Steakhouse was the only division of the company to report comparable-store sales growth. The chain, a top performer in Darden's portfolio since the pandemic, posted comparable-store sales growth of 3.7%.
Despite the dismal quarter, Darden reiterated its full-year guidance. Darden forecasts earnings per share from continuing operations of $9.40 to $9.60 and net sales of $11.8 billion to $11.9 billion.
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