Darden Restaurants on Thursday reported mixed quarterly results as Olive Garden’s same-store sales fell for the second consecutive quarter.
For fiscal 2025, Darden is forecasting that its same-store sales will grow just 1% to 2%.
Shares of the company rose more than 2% in premarket trading.
Here’s what the company reported compared with what Wall Street was expecting for the quarter ended May 26, based on a survey of analysts by LSEG:
- Earnings per share: $2.65 adjusted vs. $2.61 expected
- Revenue: $2.96 billion vs. $2.97 billion expected
Darden reported fiscal fourth-quarter net income of $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’s Chris acquisition and other items, the company earned $2.65 per share.
Net sales rose 6.8% to $2.96 billion, fueled by its acquisition of Ruth’s Chris Steak House and 37 other net new locations.
Darden’s overall same-store sales were flat for the quarter, dragged down by weaker-than-expected sales at Olive Garden and its fine-dining restaurants.
Olive Garden’s same-store sales fell 1.5%. Analysts were expecting the Italian-inspired chain to report flat same-store sales growth, according to StreetAccount estimates. Last quarter, Olive Garden’s same-store sales fell 1.8%, driven by a pullback from low-income consumers.
Darden’s fine-dining restaurants, which include The Capital Grille and Eddie V’s, saw their same-store sales shrink 2.6% in the quarter. That division now includes Ruth’s Chris, but those same-store results won’t be included in the category total for several more quarters.
LongHorn Steakhouse, which is overtaking Olive Garden as the gem of Darden’s portfolio, was the only segment to report same-store sales growth. The chain’s same-store sales rose 4% in the quarter.
Looking to fiscal 2025, Darden is forecasting earnings per share from continuing operations of $9.40 to $9.60, in line with Wall Street’s expectations of $9.55 per share. The company is also anticipating net sales of $11.8 billion to $11.9 billion, on the low end of analysts’ expectations of $11.94 billion.
Darden is projecting total inflation of 3% and same-store sales growth of 1% to 2% in fiscal 2025. Ruth’s 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.