Darden profit tops forecasts as sales and key chains trail estimates
Darden beat adjusted earnings expectations for its fiscal fourth quarter, while revenue and same-store sales growth at Olive Garden lagged forecasts.
By Daniel Okafor · Business Editor
2 min read
Darden Restaurants beat Wall Street’s adjusted profit forecast for its fiscal fourth quarter, but its revenue came in slightly below expectations. CNBC reported that investors also focused on weaker-than-expected same-store sales growth at Olive Garden and the company’s fine-dining restaurants.
The restaurant operator’s shares fell more than 1% in premarket trading after the results, according to CNBC. The move followed a report that showed stronger earnings than analysts had projected, alongside softer sales measures in parts of the business.
Quarterly results
Darden reported adjusted earnings of $3.66 per share for the quarter, CNBC said, citing analyst estimates compiled by LSEG. Analysts surveyed by LSEG had expected adjusted earnings of $3.63 per share.
Revenue reached $3.72 billion, according to Darden’s results cited by CNBC. That was just under the $3.73 billion expected by Wall Street analysts in the LSEG survey.
Darden said net income rose to $404.9 million, or $3.51 per share, from $303.8 million, or $2.58 per share, in the same period a year earlier. CNBC reported that adjusted earnings excluded costs tied to restaurant closures and other items.
Net sales increased 13.7% to $3.72 billion, according to CNBC. The report said the total was helped by the inclusion of an extra week in the fiscal year.
Key figures
- Adjusted earnings per share: $3.66, compared with $3.63 expected by analysts surveyed by LSEG, according to CNBC.
- Revenue: $3.72 billion, compared with $3.73 billion expected by analysts surveyed by LSEG, according to CNBC.
- Net income: $404.9 million, up from $303.8 million a year earlier, according to Darden figures reported by CNBC.
- Net sales growth: 13.7%, helped by an extra fiscal week, according to CNBC.
The sales shortfall drew attention because Darden’s restaurant brands include Olive Garden, one of its best-known chains. CNBC reported that same-store sales growth at Olive Garden missed expectations, as did growth at the company’s fine-dining restaurants.
The report did not provide same-store sales growth figures for Olive Garden or the fine-dining segment. It also did not specify which closure costs or other items were excluded from adjusted earnings.
Darden’s quarter therefore gave investors two signals at once: profit per share came in above the consensus forecast, while revenue and comparable sales measures did not match analysts’ expectations, according to CNBC and LSEG data cited in the report.
This story draws on original reporting from CNBC.