Darden Cafés on Friday detailed quarterly income and income that beat Money Road’s assumptions, as shoppers kept on eating out notwithstanding strain from expansion.
Additionally, the company increased the range of its earnings forecast for fiscal 2023 from $10.2 billion to $10.4 billion to $10.3 billion to $10.45 billion.
In the midst of losses across the market as a whole, Darden shares ended the day about 2% lower.
Based on a Refinitiv survey of analysts, here is what the company reported for the fiscal second quarter that ended on November 27 in comparison to what Wall Street was expecting:
- Profit per share: $1.52 changed versus $1.44 anticipated.
- Revenue: $2.49 billion versus the anticipated $2.43 billion
Darden’s all out deals rose 9.4% contrasted and a similar quarter the year before.
Darden also stated that its total expenses increased to $2.25 billion from $2.03 billion the previous year, primarily as a result of rising costs for produce, dairy, and grains. Additionally, the company cited the increased costs of labor and construction as reasons for the increase in costs.
In the earnings release, CEO Rick Cardenas expressed his satisfaction with the company’s performance during the quarter, stating that “all of their brands performed at a high level” and that “the company exceeded $10 billion in sales on a trailing 52-week basis for the first time in Darden’s history.”
Same-store sales at Olive Garden, which accounts for nearly half of Darden’s revenue, increased by 7.6%, while the company’s overall same-store sales increased by 7.3%. LongHorn Steakhouse, the company’s second-largest brand, experienced a similar increase of 7.3%.
During the conference call, company executives stated that sales at its restaurants reached an all-time high on Thanksgiving and that they anticipate that sales will continue to rise throughout the holiday season.
Darden claimed that as of the end of the quarter, it had 1,887 open locations, up from 1,852 the year before.
On Friday, Darden Restaurants Inc. surpassed analyst estimates for revenue and profit, but the company’s stock price did not rise as a result.
Darden DRI, -2.07% reported a decline in its fiscal second-quarter profit from $193.2 million, or $1.48 per share, to $187.2 million, or $1.52 per share.
The business, which owns Olive Garden and LongHorn Steakhouse, saw an increase in revenue from $2.27 billion to $2.49 billion.
Consensus estimates from FactSet indicate that on a revenue of $2.43 billion, Wall Street analysts anticipated Darden to earn $1.44 per share.
In contrast to the analyst estimate of $7.73 per share, Darden now anticipates 2023 earnings of $7.60 to $8 per share.
In addition, the business anticipated sales of between $10.45 billion and $10.3 billion in 2023, as opposed to an analyst estimate of $10.33 billion.
Brian Vaccaro, an analyst at Raymond James, maintained an outperform rating on the stock and stated that the company’s sales exceeded expectations due to “very strong” Olive Garden sales, despite the fact that results were offset by higher food inflation.
Rick Cardenas, CEO of Darden, stated that he was pleased with the performance of the business. He stated, “By remaining focused on our back-to-basics operating philosophy anchored in food, service, and atmosphere, all of our brands performed at a high level.”
According to Cardenas, Darden’s sales for the preceding 52 weeks exceeded $10 billion for the first time in the company’s history.
In premarket trades, Darden shares dropped 1.9 percent. The S&P 500 SPX, -1.11% is down 18.3% in 2022, while the stock is down 5.2%.
