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Darden Restaurants Reports Weaker-Than-Expected Sales Amid Weather Challenges
Darden Restaurants, the parent company of popular chains like Olive Garden and LongHorn Steakhouse, reported weaker-than-expected sales due to unfavorable weather conditions. Despite this, the company maintained its full-year forecast, boosting investor confidence.
Lead: Darden Restaurants, a major player in the dining industry, announced on Thursday its fiscal third-quarter results, revealing sales that fell short of analysts’ expectations as its key restaurants, Olive Garden and LongHorn Steakhouse, struggled with weather-related disruptions. The report, covering the period ending February 23, showed the company recorded a net income of $323.4 million or $2.74 per share. This performance led to a 5% share price increase as the company reassured investors of its optimistic full-year outlook.
Key Financial Highlights
– **Earnings per Share (EPS)**:
– Reported: $2.80 (adjusted)
– Expected: $2.79
– **Revenue**:
– Reported: $3.16 billion
– Expected: $3.21 billion
– **Net Income**:
– Increased to $323.4 million from $312.9 million year-over-year
– **Same-Store Sales**:
– Overall growth of 0.7%, below the anticipated 1.7% increase
Impact of Weather on Sales
Executives attributed the quarterly slowdown primarily to severe winter weather, stating:
– “When excluding weather, same-store sales across all four of Darden’s segments grew during the quarter,” noted CEO Rick Cardenas.
– Analysts found that consumers earning under $50,000 limited their casual dining expenditures.
Performance of Key Restaurant Brands
Both Olive Garden and LongHorn Steakhouse reported disappointing same-store sales:
– **Olive Garden**:
– Same-store sales rose 0.6%, missing the 1.5% growth forecast.
– Successful delivery rollout in collaboration with Uber Direct; delivery customers are spending 20% more than curbside pickups.
– **LongHorn Steakhouse**:
– Same-store sales increased 2.6%, falling short of the anticipated 5% growth.
Future Outlook and Strategy
Despite the quarterly challenges, Darden reaffirmed its full-year revenue forecast of $12.1 billion while updating its adjusted earnings expectation:
– Adjusted earnings projected between $9.45 and $9.52 per share.
– Strong sales momentum in early March, with both Olive Garden and LongHorn reversing downturns.
Challenges in Fine Dining Segment
Darden’s fine dining sector, including brands like The Capital Grille and Ruth’s Chris Steak House, experienced a 0.8% decline in same-store sales, indicating caution among consumers regarding higher check averages post-holidays.
Conclusion: Darden Restaurants’ latest financial report illustrates the impact of external factors such as weather on sales but also highlights resilience through strategic initiatives like the expansion of delivery options. Moving forward, the company remains optimistic about its growth potential and ability to navigate challenging economic conditions.
Keywords: Darden Restaurants, Olive Garden, LongHorn Steakhouse, earnings report, same-store sales, EBITDA, restaurant industry news, fiscal outlook
Hashtags: #DardenRestaurants #OliveGarden #LongHornSteakhouse #EarningsReport #RestaurantIndustry #FinancialNews #FoodandBeverage
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