Sign of Olive Garden Italian restaurant with corporate logo, Spokane Valley, Washington, owned by Darden Restaurants Incorporated with headquarters in Florida.
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Restaurants Darden reported mixed quarterly results on Thursday as Olive Garden’s store sales declined for the second consecutive quarter.
For the 2025 fiscal 12 months, Darden forecasts that store sales will only increase by 1 to 2%.
The company’s shares rose greater than 2 percent in premarket trading.
Here’s what the corporate reported in comparison with Wall Street expectations for the quarter ended May 26, based on an analyst survey conducted by LSEG:
- Earnings per share: $2.65 adjusted versus $2.61 expected
- Revenue: $2.96 billion versus $2.97 billion expected
Darden reported fourth-quarter net income of $308.1 million, or $2.57 per share, down from $315.1 million, or $2.58 per share, a 12 months earlier.
Excluding the fee of acquiring Ruth’s Chris and other items, the corporate earned $2.65 per share.
Net sales increased 6.8% to $2.96 billion, primarily as a result of the acquisition of Ruth’s Chris Steak House and 37 other latest locations.
Darden’s total store sales were flat within the quarter, dragged down by weaker-than-expected sales at Olive Garden and its fine-dining restaurants.
Olive Garden’s sales fell 1.5 percent. Analysts had expected the Italian-inspired chain to see stagnant sales growth in its stores, in response to StreetAccount estimates. Last quarter, Olive Garden’s store sales fell 1.8%, reflecting a decline in low-income consumers.
Darden’s upscale restaurants, which include The Capital Grille and Eddie V’s, saw sales decline 2.6 percent within the quarter. The division now includes Ruth’s Chris, however the stores’ results won’t be included within the category total for several quarters.
LongHorn Steakhouse, which overtakes Olive Garden because the jewel of Darden’s portfolio, was the one segment to report comparable-store sales growth. The chain’s sales rose 4% within the quarter.
For fiscal 2025, Darden forecasts earnings per share from continuing operations of $9.40 to $9.60, in keeping with Wall Street expectations of $9.55 per share. The company also expects net sales of $11.8 billion to $11.9 billion, on the low end of analyst expectations of $11.94 billion.
Darden forecasts headline inflation of three% and comparable store sales growth of 1% to 2% for fiscal 12 months 2025. Ruth’s Chris won’t be included in Darden’s comparable store sales until the second quarter of fiscal 12 months 2025. The company plans to take a position between $550 million and $600 million.
