Signage for Olive Garden, an Italian restaurant in Spokane Valley, Washington, owned by Florida-based Darden Restaurants Incorporated, features the company logo.
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Darden Restaurant Olive Garden reported mixed quarterly earnings Thursday as same-store sales declined for the second consecutive quarter.
Darden expects same-store sales to grow just 1% to 2% in fiscal 2025.
The company’s shares rose more than 2% in premarket trading.
Here’s how the company’s report for the quarter ending May 26 compared with Wall Street expectations, based on LSEG’s analyst survey.
Adjusted earnings per share: $2.65 (expected: $2.61)Revenue: $2.96 billion (expected: $2.97 billion)
Darden said its fourth-quarter net income was $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 Ruth Chris acquisition and other items, the company earned $2.65 per share.
Net sales increased 6.8 percent to $2.96 billion, driven by the acquisition of Ruth’s Chris Steak House and the opening of 37 other new stores.
Darden’s same-store sales were flat for the quarter as sales at Olive Garden and fine dining restaurants fell short of expectations.
Olive Garden’s same-store sales fell 1.5%. Analysts had expected the Italian-style chain to post flat same-store sales growth, according to Street Accounts estimates. Last quarter, Olive Garden’s same-store sales fell 1.8% due to a decline in lower-income consumers.
Darden’s fine-dining restaurants, which include Capital Grille and Eddie Vie’s, saw same-store sales fall 2.6% in the quarter. The division now also includes Ruth’s Chris, whose same-store sales will not be included in the division totals for the next few quarters.
LongHorn Steakhouse, which has overtaken Olive Garden as the jewel in Darden’s portfolio, was the only division to report a same-store sales increase. The chain’s same-store sales rose 4% for the quarter.
Darden now expects earnings per share from continuing operations of $9.40 to $9.60 for fiscal 2025, in line with Wall Street’s expectations of $9.55 per share. The company also expects net sales of $11.8 billion to $11.9 billion, at the low end of analysts’ estimates of $11.94 billion.
Darden projects inflation of 3% and same-store sales growth of 1% to 2% for fiscal 2025. Ruth Chris won’t be included in Darden’s same-store sales until the second quarter of fiscal 2025. The company plans to spend $550 million to $600 million on capital expenditures.
