A sign hangs on the front of an Olive Garden restaurant on June 22, 2023 in Chicago, Illinois.
Scott Olsen | Getty Images
Darden Restaurants on Thursday reported weaker-than-expected quarterly earnings and revenue as sales weakened at Olive Garden and its fine dining restaurants.
While we fell short of our expectations for the first quarter, I firmly believe in the strength of our business,” CEO Rick Cardenas said in a statement. I am confident in the actions all our brand teams are taking to address their guests’ needs, which do not compromise the long-term health of our business for short-term benefits.
Shares of the company rose about 10% in premarket trading despite the results.
Here’s what the company reported for the quarter ended Aug. 25 compared with what Wall Street was expecting, based on a survey of analysts by LSEG:
- Earnings per share: $1.75 adjusted vs. $1.83 expected
- Revenue: $2.76 billion vs. $2.8 billion expected
Darden reported fiscal 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 costs related to its purchase of Tex-Mex chain Chuy’s, the restaurant company earned $1.75 per share.
Net sales rose 1% to $2.76 billion, but the company’s same-store sales declined 1.1% in the quarter. Traffic to its restaurants sharply fell in July but then improved, 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 the hopes of bringing back customers.
Darden’s fine-dining segment, which includes Eddie V’s and The Capital Grille, reported same-store sales declines of 6%.
LongHorn Steakhouse was the company’s only division to report same-store sales growth. The chain, a top performer in Darden’s portfolio since the pandemic, saw same-store sales growth of 3.7%.
Despite the gloomy quarter, Darden reiterated its full-year forecast. Darden is forecasting earnings per share from continuing operations of $9.40 to $9.60 and net sales of $11.8 billion to $11.9 billion.
