Darden restaurants On Thursday, he reported weakest sales of what was expected when Olive Garden and Larchorn Steakhouse had a lower performance of analysts projections.
The restaurant company blamed the weather for the slowdown of sales and maintained its prognosis of the whole year, which raised the confidence of investors that the quarter was a mistake.
Darden's shares increased 5% on Thursday.
This is what the company reported compared to what Wall Street expected, based on an LSEG analysts survey:
- Profit per action: $ 2.80 adjusted compared to $ 2.79 expected
- Revenue: $ 3.16 billion compared to $ 3.21 billion expected
Darden reported a net income of the third fiscal quarter of $ 323.4 million, or $ 2.74 per share, compared to $ 312.9 million, or $ 2.60 per share, a year earlier.
Excluding the costs related to its acquisition of Chuy's, Darden won $ 2.80 per share.
Net sales increased 6.2% to $ 3.16 billion, largely fed by the addition of Chuy restaurants to their portfolio.
Sales of the same Darden store increased 0.7%, less than the 1.7% increased by analysts, according to Streetacount estimates.
Executives blamed the low temperatures and snowstorms of this winter for the disappointing quarter ending on February 23. By excluding the weather, sales in the same store in the four segments of Darden grew during the quarter, and only consumers won less than $ 50,000 spent less on their casual restaurants.
“Even yes [consumers] Let's say they feel less optimistic, we have not seen a great correlation between that and dinner, “said CEO Rick Cardenas to analysts at the company's telephone conference.” So I think that while income rises and overcomes inflation, I think they are still spent. “
Both Olive Garden and Larchorn Steakhouse, who are typically the two prominent of the Darden portfolio, reported a sales growth of the same store. Sales in the same Olive Garden store rose 0.6%. Analysts anticipated sales growth in the same 1.5%store. And the sales of the same Larchorn store increased 2.6%, the expectations of 5%growth missing analysts.
In February, Olive Garden finished implementing the delivery with Uber Direct. The chain delivery customers generally spend 20% more than the average choice of the sidewalk, and the volume of delivery orders for Olive Garden increases every week.
“Now at the end of the third quarter, our pilot restaurants ran around 2.5% of sales in delivery, and the other restaurants followed that same pattern,” Cardenas said.
In the first three weeks of March, both Olive Garden and Larchorn saw a strong impulse, executives said.
The Darden Restoration Segment, which includes the capital Grille and Chris Steak House of Ruth, reported sales decreases in the same 0.8%store. The segment saw a stronger demand during the holiday season, but consumers withdrew again in the New Year.
“We are seeing the management of more persistent checks after the holidays, so I suppose we are not yet ready to claim the victory over the good dinner. It is still soft,” said Cardenas.
The last segment of the Darden business, which includes the Casa Scratch Kitchen and Yard Cheddar, saw that the sales of the same store shrink 0.4% in the quarter.
For the whole year, Darden reiterated his prognosis for revenue of $ 12.1 billion. First he reduced his perspective for adjusted profits of continuous operations at a range of $ 9.45 to $ 9.52 per share. Its previous forecast was $ 9.40 to $ 9.60 per share.
Darden's fiscal perspective 2025 includes Chuy's results, but the Tex-Mex chain will not be included in its sales metrics in the same store to the fourth fiscal quarter in 2026.
