Darden Restaurants (NYSE:DRI), the parent company of Olive Garden, reported fourth-quarter earnings that beat expectations and announced that former CEO Gene Lee plans to step down as chair of its board, sending its shares lower in pre-market trading.
The restaurant group reported a 6.4% rise in total sales to $2.8 billion for the quarter ended May 28, 2023, in line with the $2.77 billion pencilled in by Wall Street analysts.
Same restaurant sales at its LongHorn SteakHouse chain rose 7.1%, ahead of expectations, while Olive Garden disappointed with growth of 4.4%.
Diluted net earnings per share (EPS) jumped 15% to $2.58 against analysts’ expectations of $2.54.
For the full year, total sales increased by 8.9% to $10.5 billion, with a 6.8% increase in same-restaurant sales. It opened 47 net new restaurants during the year.
Full-year EPS came in 8.1% higher at $8.00.
"We had a solid quarter to conclude a strong year in which we met or exceeded our financial outlook, despite a tough operating environment. Throughout fiscal 2023, our strategy continued to serve us well," president and CEO Rick Cardenas said in an earnings statement.
The company has guided for FY24 sales of $11.5 billion to $11.6 billion.
Separately, it announced that chair Gene Lee has decided not to stand for reelection at the company's 2023 annual meeting in September. Lee retired just over a year ago as CEO.
"I am proud of what we have accomplished and believe that Darden is well-positioned to continue to grow and prosper for years to come,” Lee commented.
Darden’s shares were down 3.7% at $160.25 ahead of the market open.
Contact the author at stephen.gunnion@proactiveinvestors.com