Shares of Darden Restaurants jumped 4.5 percent Tuesday after the company reported earnings and sales that outpaced expectations and raised its forecast for fiscal 2018.
The company, which owns a large portfolio of restaurants including Olive Garden, LongHorn Steakhouse and Yard House, saw same-store sales of its legacy brands rise 3.1 percent in the fiscal second quarter. Analysts estimated same-store sales would grow about 1.4 percent, according to StreetAccount.
"Our strong same-restaurant sales and new restaurant growth drove continued market share gains during the quarter," Darden CEO Gene Lee said in a statement. "That performance, in addition to our solid earnings growth, is a result of executing on our strategy."
For the fiscal second quarter ended Nov. 26, Darden said it earned $84.7 million, or 67 cents per share, up from earnings of $79.5 million, or 64 cents a share, a year ago.
After removing one-time costs and the impact of discontinued operations, Darden earned 73 cents a share, 3 cents better than expected by analysts in a Thomson Reuters survey.
Revenue rose to $1.88 billion from $1.64 billion. Analysts expected $1.86 billion in revenue, Thomson Reuters said.
Darden increased its full-year earnings estimates to a range of $4.45 to $4.53 per share. Previously, the company said its earnings would be in a range of $4.38 to $4.50 per share.
Also, same-store sales growth for the year is now estimated to be about 2 percent, the high end of its previous expectation of between 1 and 2 percent.
All but two of Darden's brands exceeded analysts' same-store sales expectations.
"This quarter's results demonstrated Darden's ability to deliver solid performance across its portfolio of brands, despite on-going casual dining headwinds," BTIG analyst Peter Saleh wrote in a research note Tuesday.
This strong same-store sales growth comes after a series of hurricanes battered sales at Darden restaurants in the last quarter. At the time, Darden said Hurricane Harvey not only squelched sales in the fiscal first quarter but also weighed heavily on the company's earnings.
Lee said the restaurant brands "did a great job managing through some difficult circumstances recovering from hurricanes."
Olive Garden's same-store sales grew 3 percent in the second quarter, its 13th-consecutive quarter of positive growth. Analysts had called for the restaurant chain to grow 1.6 percent. Lee noted during an earnings conference call Tuesday that Olive Garden's To-Go service grew 12 percent in the quarter.
Same-restaurant sales for Cheddar's Scratch Kitchen, which was only recently added to Darden's portfolio and isn't included in the company's same-store sales of legacy brands metric, fell 2 percent in the quarter. Analysts had foreseen a drop of about 0.6 percent.
Eddie V's had the biggest beat, with same-store sales rising 6.8 percent in the quarter. It was anticipated that the brand would post same-store sales growth of about 1 percent.
In addition, LongHorn Steakhouse saw its 19th-consecutive quarter of positive same-store sales growth.
Correction: An earlier version misstated the amount of quarterly revenue projected by analysts surveyed by Thomson Reuters. It was $1.86 billion.