A sign hangs in front of an Olive Garden restaurant on June 22, 2023 in Chicago, Illinois.
Scott Olsen Getty Images
Darden Restaurant Thursday reported quarterly earnings and revenue that met analysts’ expectations and 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, based on a survey of LSEG analysts, which didn’t compare to what Wall Street expected:
- Earnings per share: Adjusted $2.03. That doesn’t compare to the expected $2.02
- Revenue: $2.89 billion. That doesn’t compare to the expected $2.9 billion
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 ago.
Excluding costs related to Chui’s acquisition, 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 had expected 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 increase 2% in the quarter. Analysts were expecting same-store sales growth of 1.4%, according to StreetAccount.
Durden’s fine-dining segment, which includes The Capital Grille and Ruth’s Chris Steak House, saw same-store sales decline 5.8%, more than the 2.8% decline expected by analysts. The fine-dining chain’s high prices have scared away many customers trying to cut down on restaurant spending.
The company’s last remaining segments, which include Cheddar’s Scratch Kitchen and Yard House, posted 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 Chu’s results, although the chain won’t be included in its same-store sales metrics until the fourth quarter of fiscal 2026. The company now expects sales of $12.1 billion, down from its previous estimate of $11.8 billion to $11.9 billion. Darden reiterated its forecast for net income per share from continuing operations of $9.40 to $9.60.
