A sign hangs on the front of an Olive Garden restaurant on June 22, 2023 in Chicago, Illinois.
Scott Olsen | Getty Images
Darden Restaurants on Thursday reported quarterly earnings and revenue that met analysts’ expectations and better-than-expected same-store sales growth at Olive Garden and LongHorn Steakhouse.
Shares of the company rose 8% in premarket trading.
Here’s what the company reported, which may not compare with what Wall Street was expecting, based on a survey of analysts by LSEG:
- Earnings per share: $2.03 adjusted. That may not compare with the $2.02 expected
- Revenue: $2.89 billion. That may not compare with the $2.9 billion expected
Darden reported fiscal second-quarter net income of $215.1 million, or $1.82 per share, up from $212.1 million, or $1.76 per share, a year earlier.
Excluding costs related to its acquisition of Chuy’s, the restaurant company earned $2.03 per share.
Net sales rose 6% to $2.89 billion.
Darden’s same-store sales rose 2.4%, beating StreetAccount estimates of 1.5%.
LongHorn Steakhouse reported same-store sales growth of 7.5%. The casual-dining chain has been a top performer in Darden’s portfolio in recent years, winning over customers with both the quality of its food and its prices. Wall Street was expecting the chain to report same-store sales growth of 4.1%.
Olive Garden, which accounts for more than 40% of Darden’s quarterly revenue, saw same-store sales growth of 2% in the quarter. Analysts were anticipating same-store sales growth of 1.4%, according to StreetAccount.
Darden’s fine-dining segment, which includes The Capital Grille and Ruth’s Chris Steak House, reported same-store sales declines of 5.8%, steeper than the 2.8% decrease expected by analysts. Fine-dining chains’ higher prices have scared away many consumers who are 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 growth of 0.7%, in line with estimates.
Darden added 39 net new locations in the quarter, as well as 103 Chuy’s restaurants. Darden completed its $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 be included in its same-store sales metrics until the fiscal fourth quarter in 2026. The company now anticipates total sales of $12.1 billion, up from its prior estimate of $11.8 billion to $11.9 billion. Darden reiterated its forecast for net earnings per share from continuing operations of $9.40 to $9.60.
