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Darden Restaurants shares climb on raised outlook and new buyback plan

An Olive Garden restaurant in Times Square in New York
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Shares of Darden Restaurants jumped as much as 4 percent on Tuesday after it reported mixed quarterly earnings and raised its outlook. The company also announced a new $500 million buyback plan.

The stock later pared those gains and ended the day about 0.6 percent higher.

The restaurant operator, which owns chains such as Olive Garden and LongHorn Steakhouse, posted fiscal first-quarter earnings of 88 cents a share on $1.71 billion of revenue.

Analysts expected 82 cents per share on revenue of $1.72 billion, according to Thomson Reuters consensus estimates.

"We continued to gain market share and our same-restaurant sales growth outperformed the industry by a considerable margin," said Gene Lee, CEO of Darden Restaurants, in a statement.

"We also returned significant capital to shareholders in the form of our regular dividend and $196 million in share repurchases," he added.

The company's same-restaurant sales increased by 1.3 percent in the quarter. It reaffirmed its same-restaurant sales outlook in the range of 1 to 2 percent.

Darden's board also signed off on a new share repurchase program, and the company can now repurchase up to $500 million of its outstanding common stock.

Darden raised its fiscal-year earnings guidance to a range of $3.87 to $3.97 share from $3.80 to $3.90 a share.

Darden's stock is down 3 percent year to date.

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— CNBC's Fred Imbert contributed to this report.