Darden Restaurants' Stock Rises 10% On Strong Financial Results

12/19/2024 3:12:37 PM

(MENAFN- Baystreet) The stock of Darden Restaurants (DRI) is up 10% after the company behind franchises Olive Garden and LongHorn Steakhouse reported strong quarterly financial results.

The Orlando, Florida-based company announced earnings per share (EPS) of $2.03 U.S., which was slightly ahead of the $2.02 U.S. expected on Wall Street.

Revenue in the period totaled $2.89 billion U.S., which matched the consensus forecast of analysts. Net Sales were up 6% from a year earlier.

Darden also reported that its same-store sales rose 2.4% during the latest quarter, beating estimates that called for growth of 1.5%.

The LongHorn Steakhouse restaurant chain was the standout during the quarter, reporting same-store sales growth of 7.5%. Wall Street expected LongHorn to report same-store sales growth of 4.1%.

Olive Garden, which accounts for more than 40% of Darden's revenue, saw same-store sales growth of 2% during the quarter. Analysts were anticipating same-store sales growth of 1.4%.

However, Darden's pricier fine-dining segment, which includes The Capital Grille and Ruth's Chris Steak House, reported a same-store sales decline of 5.8%, which was worse than the 2.8% decrease expected by analysts.

Management at Darden Restaurants said they added 39 net new locations during the quarter, as well as 103 Chuy's restaurants.

Darden completed its $605 million U.S. acquisition of the Chuy's Tex-Mex restaurant chain in October of this year.

The company also updated its fiscal 2025 outlook, saying it now anticipates total sales of $12.10 billion U.S., up from a previous estimate of $11.80 billion U.S. to $11.90 billion U.S.

Darden reiterated its forecast for net EPS from continuing operations of $9.40 U.S. to $9.60 U.S.

Prior to today (Dec. 19), the stock of Darden Restaurants had declined 2% on the year to trade at $159.87 U.S. per share.

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