Darden Restaurants Reports Mixed Results for Q2

Darden Restaurants, the parent company of the Olive Garden restaurant chain, released its fiscal second-quarter results, revealing both positive and negative trends. While sales slightly fell short of expectations, earnings surpassed forecasts, prompting management to raise its financial guidance.

Sales Figures

Darden reported that for the quarter ending on November 26, sales reached $2.727 billion, marking an increase from the previous year. However, this figure fell short of the consensus estimate of $2.742 billion among analysts surveyed by FactSet. On a positive note, same-store sales experienced a 2.8% growth, surpassing the 2.7% increase that Wall Street had anticipated.

Strong Earnings

The company's adjusted earnings per share came to $1.84, surpassing the projected $1.74 figure set by analysts. This represents an improvement from the previous year's earnings of $1.52 per share.

Positive Market Share Growth

Rick Cardenas, president and CEO of Darden, expressed satisfaction with the company's performance, stating that they "continued to profitably grow market share" during the quarter. Cardenas emphasized that Darden outperformed industry measures for same-restaurant sales and traffic.

Raised Guidance

In light of the positive results, Darden has adjusted its guidance for the fiscal year. The company now expects adjusted earnings between $8.75 and $8.90 per share, up from the previously estimated range of $8.55 to $8.85.

Market Reaction

While there were several positive aspects in the earnings report, investors appeared to focus on the slight sales shortfall. As a result, Darden's stock declined by 1.8% to $160.20 in premarket trading.