Darden Restaurants Earnings Rise, Hit Expectations
Darden Restaurants posted a 12% rise in quarterly earnings, helped by higher prices at its Red Lobster and Olive Garden chains and a larger number of restaurants.
Second-quarter net income was $61.7 million, or 41 cents a share, compared with $55.1 million, or 35 cents a share, a year ago.
Wall Street analysts, on average, had been expecting earnings of 41 cents a share, according to Reuters Estimates.
Sales rose 4.5% to $1.39 billion, helped by higher sales at established Red Lobster and Olive Garden outlets and the addition of more Olive Garden and Smokey Bones restaurants.
Analysts, on average, had been expecting sales of $1.4 billion, according to Reuters Estimates.
Same-store sales, a key measure that tracks sales at restaurants open at least 16 months, rose 2.9% at Olive Garden and climbed 0.7% at Red Lobster.
In November, customer traffic was flat at Olive Garden and fell 2% to 3% at Red Lobster. Guest counts have suffered at many casual restaurants this year because higher prices at gas pumps are eating into consumers' dining out budgets.
On average, customer checks were higher in November due to price increases, Darden said.
Darden said it still expects earnings per share to rise between 10% and 12% this year. Same-store sales are expected to be up between 2% and 4% for Red Lobster and Olive Garden.