An Olive Garden restaurant in Silverdale. Darden Restaurants, Inc. The company, which owns Olive Garden and other restaurant chains, is scheduled to report its fourth-quarter 2022 earnings on June 23.
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Darden Restaurant‘ Quarterly earnings and revenue beat analysts’ expectations, shaking off inflationary pressures as diners returned to Longhorn Steakhouse and The Capital Grill.
Faced with high costs and economic uncertainty, Olive Garden’s parent company issued a mixed forecast for fiscal year 2023.
Shares of the company rose 5 per cent in premarket trading on Thursday.
Here’s what the company reported compared to Wall Street’s expectation, based on a survey of analysts by Refinitiv:
- Earnings Per Share: $2.24 vs. $2.21 Expected
- Revenue: $2.6 billion versus $2.54 billion expected
Darden reported fiscal fourth-quarter net income of $281.7 million, or $2.24 per share, down from $368.5 million, or $2.78 per share, a year ago. Analysts polled by Refinitiv were expecting earnings per share of $2.21.
gross sales It rose 14.2% to $2.6 billion, topping expectations of $2.54 billion. Across the company’s chains, same-store sales climbed 11.7%, fueled by the rebound of its fine dining business.
Its fine-dining restaurants, which include The Capital Grill and Eddie V’s, posted a 34.5% increase in same-store sales. The segment was hit hardest by the pandemic, but its sales crossed 2019 levels in the fourth quarter of the fiscal year.
Olive Garden, which accounts for nearly half of Darden’s revenue, saw its same-store sales increase by just 6.5% in the quarter. Wall Street was expecting a 7.2% increase in same-store sales for the Italian-inspired chain, according to StreetAccount estimates.
Strong demand for Longhorn Steakhouse helped make up the difference. The steak restaurant chain reported same-store sales growth of 10.6%, beating analysts’ estimates of 5.6%.
For its fiscal 2023, Darden is expecting earnings per share from continuing operations of $7.40 to $8, which is below analysts’ expectations of $8.11. The company is assuming that inflation will increase by 6% in the new financial year. Its revenue outlook of $10.2 billion to $10.4 billion is in line with Wall Street’s estimate of $10.22 billion.
Darden also expects same-store sales growth of 4% to 6% in fiscal 2023 and 50 to 60 new restaurant openings.
The company’s board authorized a new $1 billion share buyback program. It has no expiry date.