Shares of Darden Restaurants (NYSE:DRI), the parent company of Olive Garden, looked set to open lower on Thursday despite the company reporting first-quarter earnings that beat revenue and earnings estimates.
Total sales for the quarter ended August 27, 2023, rose 11.6% to $2.73 billion, boosted by the addition of 77 company-owned Ruth's Chris Steak House (Ruth's Chris) restaurants and 46 other net new restaurants. Same restaurant sales were 5% higher. Wall Street analysts had pencilled in sales of $2.71 billion.
Sales at its Olive Garden chain rose 8.6%, while its LongHorn Steakhouse restaurants grew sales by 10.8%. Fine Dining sales jumped 49%.
Adjusted earnings per share, which exclude the transaction and integration costs from this year's acquisition of Ruth’s Chris, jumped 14.1% to $1.78. That was ahead of the $1.73 consensus estimate of 13 analysts, according to Zacks Investment Research.
"Looking across our entire portfolio, I am pleased with our first quarter results," Darden president and CEO Rick Cardenas commented in a statement.
"Our strategy is working. We continue to grow share, strengthen margins, and make meaningful investments in our business while returning capital to shareholders."
The company has stuck to its full-year 2024 financial guidance of adjusted diluted net EPS from continuing operations of $8.55 to $8.85, including Ruth's Chris operating results, but excluding approximately $55 million, pre-tax, of expected transaction and integration-related costs.
It also announced that its board has unanimously elected Cynthia Jamison as its chair, succeeding Gene Lee, who retired at its annual general meeting on September 20.
Ahead of the opening bell, the company’s shares were down 1.3% at $147.50.
Contact the author at stephen.gunnion@proactiveinvestors.com