Darden Restaurants reported quarterly profits and sales Thursday that met analysts’ expectations, and same-store sales at Olive Garden and Longhorn Steakhouse also beat expectations.
The company’s shares closed up 14% on Thursday.
Here’s how the company reported compared to Wall Street expectations, based on a survey of analysts by LSEG.
- Earnings per share: Adjusted $2.03 vs. expected $2.02
- Revenue: $2.89 billion vs. $2.9 billion expected
Darden reported second-quarter net income of $215.1 million, or $1.82 per share, compared to $212.1 million, or $1.76 per share, in the year-ago period.
Excluding charges related to the Chuy’s acquisition, the restaurant company earned $2.03 per share.
Net sales increased 6% to $2.89 billion.
Darden’s same-store sales increased 2.4%, beating Street accounts’ expectations of 1.5%.
“Consumers seem to be starting to feel a little bit better than in previous quarters,” CEO Rick Cardenas said on a conference call.
Customers with incomes between $50,000 and $100,000 are visiting Darden restaurants more frequently, but higher-income customers are not seeing an increase.
Darden also experienced “significant impacts” from Hurricanes Helen and Milton, Cardenas said. But only one restaurant, Cheddar’s Scratch Kitchen in Asheville, North Carolina, has not been able to reopen. The restaurant is expected to open again next year.
Longhorn Steakhouse reported a 7.5% increase in same-store sales. The casual dining chain has been a top performer in Darden’s portfolio in recent years, attracting customers with both food quality and price. Wall Street had expected the chain’s same-store sales to rise 4.1%.
Olive Garden, which accounts for more than 40% of Darden’s quarterly revenue, saw same-store sales increase 2% in the quarter. Analysts had expected same-store sales to rise 1.4%, according to Street Account.
Olive Garden brought back its Never Ending Pasta Bowl promotion this quarter. This time, customers were more likely to spend more on adding protein. The company is also piloting Uber delivery at 100 restaurants, with the goal of rolling it out to the remaining locations after the holidays.
Darden’s fine dining division, which includes The Capital Grille and Ruth’s Chris Steakhouse, reported a 5.8% drop in same-store sales, a sharper decline than analysts expected for a 2.8% decline. High prices at high-end restaurant chains are scaring off many consumers who are looking to cut back on their restaurant spending.
Darden’s chief financial officer, Raj Venum, said the rescheduling of this year’s Thanksgiving from the company’s fiscal second quarter to its fiscal third quarter also hurt fine dining sales. It is said that he gave it. Excluding this impact and the hurricane-related sales decline, same-store sales in the fine dining segment were down just 3.8%, an improvement from the 6% drop in the previous quarter.
The company’s last remaining division, which includes Cheddar’s Scratch Kitchen and Yard House, saw same-store sales increase 0.7%, matching expectations.
Darden added 39 net new stores and 103 Chuy’s restaurants during the quarter. Darden completed its acquisition of the Tex-Mex chain in October for $605 million.
The company updated its fiscal 2025 outlook to include Chuy’s results, but the chain will not be included in its same-store sales metrics until the fourth quarter of 2026.
The company now expects total sales of $12.1 billion, up from its previous estimate of $11.8 billion to $11.9 billion. Darden reiterated his outlook for net income per share from continuing operations of $9.40 to $9.60.
