A sign hangs in front of the Olive Garden restaurant on June 22, 2023 in Chicago, Illinois.
Scott Olsen | Getty Images
Restaurants in Darden Better-than-expected earnings and revenue for the quarter were reported on Thursday as sales slowed at Olive Garden and its fine restaurants.
“While we missed our expectations in the first quarter, I strongly believe in the strength of our business,” CEO Rick Cardenas said in a statement. “I am confident in the actions taken by all our teams to address the needs of their guests, which do not compromise the long-term health of our business for short-term benefits.”
The company’s shares rose nearly 10% in premarket trading despite the results.
Here is what the company reported for the quarter that ended in Aug. 25 compared to what Wall Street expected, based on a survey of analysts conducted by LSEG:
- Earnings per share: $1.75 adjusted vs $1.83 expected
- Revenue: $2.76 billion vs. $2.8 billion expected
Darden reported first-quarter net income of $207.2 million, or $1.74 per share, up from $194.5 million, or $1.59 per share, a year earlier.
Excluding charges related to its purchase of Tex-Mex chain Chuy’s, the restaurant company earned $1.75 per share.
Total sales rose 1% to $2.76 billion, but the company’s same-store sales fell 1.1% in the quarter. Restaurant traffic was down significantly in July but rebounded, according to CFO Raj Vennam.
Olive Garden’s same-store sales fell 2.9% in the quarter. The chain is reviving its Never Ending Pasta Bowl later this month in hopes of bringing back customers.
Darden’s restaurant division, which includes Eddie V’s and The Capital Grille, reported same-store sales fell 6%.
LongHorn Steakhouse was the only part of the company to report same-store sales growth. The chain, which has been the best performer in Darden’s portfolio since the pandemic, saw same-store sales grow by 3.7%.
Despite the disappointing quarter, Darden has reiterated its full-year forecast. Darden forecasts earnings per share from continuing operations of $9.40 to $9.60 and net sales of $11.8 billion to $11.9 billion.