Shares of Olive Garden parent hit all-time high following strong earnings beat
- Darden Restaurants post better-than-expected quarterly earnings.
- The says fourth quarter earnings were $1.18 per share on revenues of $1.935 billion.
- Analysts had expected earnings per share of $1.15 on revenues of $1.865 billion.
Shares of Darden Restaurants jumped Tuesday after the company posted better-than-expected fiscal fourth-quarter earnings.
The company said it earned $1.18 per share ex-items on revenue of $1.94 billion. Analysts had expected earnings per share of $1.15 on revenue of $1.87 billion, according to Thomson Reuters.
Darden's stock hit an all-time high of $95.22 on Tuesday, with shares up more than 5 percent.
For the year, the company reported earnings per share of $3.80 on revenue of $7.17 billion. This figure falls just shy of the forecast that Darden gave for 2017 last quarter. The company had called for earnings per share to range from $3.95 to $4 for the year.
"Our strong fourth-quarter results wrapped up a solid year of performance," CEO Gene Lee said in a statement. "We continue to improve execution in our restaurants by relentlessly focusing on food, service, and atmosphere. Our strategy is helping to build guest loyalty, drive improved financial results and grow shareholder value."
Heading into 2018, Darden expects full-year earnings in the range of $4.38 to $4.50 per share. The company noted that this figure excludes any expenses related to the integration of Cheddar's Scratch Kitchen into its portfolio. Darden announced the acquisition in March.
Darden saw same-store sales, a key metric of stores open at least a year, rise 3.3 percent in the fourth quarter, well-above Wall Street's estimate of 2.4 percent.
Its Olive Garden's same-store sales grew 4.4 percent in the fourth quarter, well above Street Account estimates of 2.9 percent. It's the 11th consecutive quarter of positive same-store sales for the brand.
Lee said that Olive Garden's success was fueled by the chain's giant stuffed pasta promotion and its ToGo program, which grew 16 percent during the quarter.
Darden's Longhorn Steakhouse and Eddie V's also saw same-store sales that were well above estimates. However, same-store sales at The Capital Grille, Bahama Breeze, Yard House and Seasons 52 failed to meet analysts' expectations.
In early June, Baird analyst David Tarantino published a research note saying inclement weather became a headwind for restaurants in the back-half of the quarter. Cheesecake Factory was among several casual dining chains that blamed rain in the Midwest for slower sales.
It is unclear if weather had any effect on Darden's same-store sales.
For 2018, the company said that it expects overall same-store sales to grow between 1 percent to 2 percent.