Darden Restaurants reported fiscal first-quarter results that fell short of Wall Street expectations. The company earned $2.04 per share on net income of $233.4 million for the quarter ended Aug. 30, compared with $2.19 per share a year earlier. Net sales rose 5.1% to $3.20 billion.
Same-store sales across Darden’s portfolio increased 3.1% during the quarter, though growth was hampered by external factors. The World Cup tournament reduced same-store sales by 80 basis points, or 0.8%, according to CFO Raj Vennam. Additionally, consumer concerns related to cyclospora outbreaks tied to fresh produce affected dining patterns, prompting Olive Garden to modify its marketing strategy mid-quarter.
Performance varied significantly across Darden’s restaurant chains. LongHorn Steakhouse led the portfolio with same-store sales growth of 6.2%, becoming the company’s top performer by growth rate, though Olive Garden remains the largest chain by locations and revenue. Olive Garden’s same-store sales increased only 1.1%, reflecting softening consumer spending patterns. The company’s fine-dining segment, which includes The Capital Grille and Ruth’s Chris, reported same-store sales growth of 1.6%, with traffic still below pre-pandemic levels. Yard House, grouped in the “other business” division, posted same-store sales growth of 10%, making it the only Darden chain to benefit from the World Cup.
Management expressed cautiously optimistic views about near-term prospects. CEO Rick Cardenas noted that restaurant performance had improved in September following the quarter’s end. The company also cited expectations for commodity cost improvements later in the fiscal year, particularly for beef. Darden is planning expansion of Yard House, scheduling 13 new restaurants for fiscal 2027, including five conversions from the shuttered Bahama Breeze chain.
For fiscal 2027, Darden projected total sales between $13.60 billion and $13.75 billion, with net earnings per share from continuing operations ranging from $11.10 to $11.35.
Article Attribution | Read More at Article Source
Article summary produced by Claude AI