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, it reported weaker-than-expected quarterly earnings and revenue as sales weakened at Olive Garden and its fine-dining restaurants.
“While we did not meet our expectations for the first quarter, I firmly believe in the strength of our business,” CEO Rick Cardenas said in a statement. “I am confident in the steps all of our brand teams are taking to serve the needs of their guests, which do not compromise the long-term health of our business for the sake of short-term profits.”
The company's shares rose about 10% in premarket trading despite the results.
Here's what the company reported for the quarter ended Aug. 25 compared with what Wall Street expected, according to a survey of analysts by LSEG:
- Earnings per share: Adjusted $1.75 vs. expected $1.83
- Revenue: $2.76 billion vs. $2.8 billion forecast
Darden reported net income for the fiscal first quarter of $207.2 million, or $1.74 per share, up from $194.5 million, or $1.59 per share, a year earlier.
Excluding costs related to the purchase of the Tex-Mex chain Chuy's, the restaurant company earned $1.75 per share.
Net sales The company's comparable-store sales rose 1% to $2.76 billion, but declined 1.1% in the quarter. Traffic to its restaurants fell sharply in July but then improved, according to Chief Financial Officer Raj Vennam.
Olive Garden's comparable-store sales fell 2.9% in the quarter. The chain is reviving its Never Ending Pasta Bowl later this month in hopes of winning back customers.
Darden's upscale restaurant segment, which includes Eddie V's and The Capital Grille, reported same-store sales declines of 6%.
LongHorn Steakhouse was the only division of the company to report same-store sales growth. The chain, one of the best performers in Darden’s portfolio since the pandemic, posted same-store sales growth of 3.7%.
Despite the dismal quarter, Darden reiterated its full-year outlook. Darden expects earnings per share from continuing operations of $9.40 to $9.60 and net sales of $11.8 billion to $11.9 billion.
