Olive Garden parent Darden Restaurants’ (DRI) Q4 2022 earnings


An Olive Backyard restaurant in Silverdale. Darden Eating places, Inc. which owns Olive Backyard and different restaurant chains is scheduled to report its fourth-quarter 2022 earnings on June 23.

Toby Scott | Lightrocket | Getty Pictures

Darden Restaurants‘ quarterly earnings and income beat analysts’ expectations, shaking off inflationary pressures as diners returned to LongHorn Steakhouse and The Capital Grille.

Within the face of upper prices and financial uncertainty, Olive Backyard’s dad or mum firm issued a blended forecast for fiscal 2023.

CEO Rick Cardenas stated that the corporate plans to stay to its technique of pricing beneath its rivals and limiting how a lot of its elevated prices it passes on to diners.

“We expect it is prudent to be cautious and protect flexibility, moderately than go by way of some prices that is probably not everlasting,” he stated.

This marks Cardenas’s first quarterly report within the prime job. Former CEO Gene Lee retired in Could after seven years main the restaurant firm.

Shares of the corporate rose as a lot as 5% in premarket buying and selling on Thursday however fell 1% after the market opened.

Here is what the corporate reported in contrast with what Wall Avenue was anticipating, based mostly on a survey of analysts by Refinitiv:

  • Earnings per share: $2.24 vs. $2.21 anticipated
  • Income: $2.6 billion vs. $2.54 billion anticipated

Darden reported fiscal fourth-quarter internet earnings of $281.7 million, or $2.24 per share, down from $368.5 million, or $2.78 per share, a 12 months earlier. Analysts surveyed by Refinitiv had been anticipating earnings per share of $2.21.

Executives stated they do not suppose the upper prices for key commodities like rooster, dairy and wheat that they are seeing might be everlasting. The corporate stated it’s making an attempt to take care of a pricing edge over smaller chains and unbiased eating places that may’t take in prices as simply and are considerably climbing menu costs.

Internet gross sales rose 14.2% to $2.6 billion, topping expectations for $2.54 billion. Throughout the corporate’s chains, same-store gross sales climbed 11.7%.

The rise was fueled by the corporate’s fine-dining eating places, which embrace The Capital Grille and Eddie V’s and reported same-store gross sales progress of 34.5%. The unit was hardest hit by the pandemic however its gross sales surpassed 2019 ranges within the fiscal fourth quarter.

Olive Backyard, which accounts for practically half of Darden’s income, noticed its same-store gross sales rise simply 6.5% within the quarter, beneath the 7.2% Wall Avenue anticipated, in keeping with StreetAccount estimates.

Sturdy demand for LongHorn Steakhouse helped make up the distinction. The steak restaurant chain reported same-store gross sales progress of 10.6%, beating analysts’ estimates of 5.6%.

For its fiscal 2023, Darden expects earnings per share from persevering with operations of $7.40 to $8, falling wanting analysts’ expectations of $8.11. The corporate is assuming that inflation will rise 6% within the new fiscal 12 months. Its income outlook of $10.2 billion to $10.4 billion is according to Wall Avenue’s estimates for $10.22 billion.

Darden can be anticipating same-store gross sales progress of 4% to six% and 50 to 60 new restaurant openings in fiscal 2023.

The corporate’s board approved a brand new $1 billion share buyback program. It doesn’t have an expiration date.

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