Olive Garden Italian restaurant sign with company logo, Spokane Valley, Washington, owned by Florida-based Darden Restaurants Incorporated.
Universal Image Group | fake images
Darden Restaurants on Thursday reported mixed quarterly results as Olive Garden's same-store sales fell for the second straight quarter.
For fiscal 2025, Darden forecasts its same-store sales will grow only 1% to 2%.
The company's shares rose more than 2% in premarket trading.
Here's what the company reported compared to what Wall Street expected for the quarter ended May 26, according to a survey of analysts by LSEG:
- Earnings per share: Adjusted $2.65 vs. expected $2.61
- Revenue: $2.96 billion vs. $2.97 billion expected
Darden reported fiscal fourth-quarter net income of $308.1 million, or $2.57 per share, down from $315.1 million, or $2.58 per share, a year earlier.
Excluding costs related to the acquisition of Ruth's Chris and other items, the company earned $2.65 per share.
Net sales increased 6.8% to $2.96 billion, driven by the acquisition of Ruth's Chris Steak House and an additional 37 net new locations.
Darden's overall same-store sales were flat during the quarter, dragged down by weaker-than-expected sales at Olive Garden and its fine-dining restaurants.
Olive Garden's comparable sales fell 1.5%. Analysts expected the Italian-inspired chain to report stable same-store sales growth, according to StreetAccount estimates. Last quarter, Olive Garden's comparable sales fell 1.8%, driven by a decline among low-income consumers.
Darden's fine-dining restaurants, which include The Capital Grille and Eddie V's, saw their same-store sales decline 2.6% in the quarter. That division now includes Ruth's Chris, but those same-store results won't be included in the category total for several quarters.
LongHorn Steakhouse, which is overtaking Olive Garden as the jewel of Darden's portfolio, was the only segment to report growth in comparable sales. The chain's comparable sales increased 4% in the quarter.
Looking ahead to fiscal 2025, Darden forecasts earnings per share from continuing operations of $9.40 to $9.60, in line with Wall Street expectations of $9.55 per share. The company also forecasts net sales of between $11.8 billion and $11.9 billion, at the lower end of analyst expectations of $11.94 billion.
Darden projects headline inflation of 3% and same-store sales growth of 1% to 2% in fiscal 2025. Chris de Ruth will not be included in Darden's same-store sales until the second quarter of fiscal year 2025. The company plans to spend between $550 and $600 million on capital expenditures.
