Darden Restaurants saw its stock decline by 5% in premarket trading on Thursday after the company reported quarterly results that narrowly missed analyst estimates. The miss was largely attributed to sluggish same-store sales growth at its Olive Garden unit.
For the quarter ended Aug. 30, Darden posted earnings per share of $2.05 against Wall Street expectations of $2.06. Revenue came in at $3.20 billion, slightly below the $3.21 billion forecast based on LSEG analyst surveys. Fiscal first-quarter net income totaled $233.4 million, or $2.04 per share, down from $257.8 million, or $2.19 per share, during the same period last year. Net sales rose 5.1% to $3.20 billion.
Overall same-store sales increased 3.1% across the quarter, with all business units reporting positive growth. LongHorn Steakhouse remained the portfolio’s strongest performer, with same-store sales jumping 6.2%. Although still smaller than Olive Garden in total revenue contribution, LongHorn has overtaken it to become the top-performing chain in the portfolio.
Olive Garden, which remains Darden’s largest chain by location count and sales, posted a modest 1.1% increase in same-store sales. The slowdown reflects increasing consumer selectivity in dining spending. Darden’s fine-dining segment, which includes The Capital Grille and Ruth’s Chris, saw same-store sales grow 1.6%, while the company’s “other business” division posted a 3.8% increase.
The company reaffirmed its full-year fiscal 2027 guidance, projecting total sales between $13.60 billion and $13.75 billion, with net earnings per share from continuing operations ranging from $11.10 to $11.35.
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