In this article, Darden Restaurants reported quarterly earnings and revenue that met analysts’ expectations, along with better-than-expected same-store sales growth at Olive Garden and LongHorn Steakhouse. The company’s shares closed up 14% on Thursday.
Compared to Wall Street expectations from a survey of analysts by LSEG, Darden reported fiscal second-quarter net income of $215.1 million, or $1.82 per share, up from $212.1 million, or $1.76 per share, a year earlier. Excluding costs related to its acquisition of Chuy’s, the restaurant company earned $2.03 per share. Net sales increased by 6% to $2.89 billion. Darden’s same-store sales rose 2.4%, surpassing StreetAccount estimates of 1.5%.
During the company’s conference call, CEO Rick Cardenas mentioned that consumers seem to be feeling better compared to previous quarters. Customers with incomes between $50,000 and $100,000 are visiting Darden’s restaurants more frequently, while higher-income diners have not increased their visits.
Darden faced “meaningful impacts” from hurricanes Helene and Milton, with only one restaurant, a Cheddar’s Scratch Kitchen in Asheville, North Carolina, remaining closed. LongHorn Steakhouse reported a same-store sales growth of 7.5%, outperforming expectations. Olive Garden, contributing over 40% of Darden’s quarterly revenue, saw a 2% same-store sales growth, higher than analysts’ estimates.
Olive Garden reintroduced its Never Ending Pasta Bowl promotion, with customers showing a tendency to spend more by adding a protein. The chain is testing Uber delivery at 100 restaurants, planning to expand it to all locations after the holiday season. Darden’s fine-dining segment, including The Capital Grille and Ruth’s Chris Steak House, reported a 5.8% decline in same-store sales, more than analysts’ expected 2.8% decrease.
The company added 39 net new locations in the quarter and acquired 103 Chuy’s restaurants. Darden updated its fiscal 2025 outlook to include Chuy’s results, projecting total sales of $12.1 billion and reiterated its net earnings per share forecast of $9.40 to $9.60 from continuing operations.
