Darden Restaurants tops comparable sales expectations as Olive Garden shines

Darden Restaurants (NYSE:DRI) reported that total sales increased 9.7% to $2.7B in FQ2, driven by a blended same-restaurant sales increase of 2.8% and sales from the addition of 78 company-owned Ruth’s Chris Steak House restaurants and 45 other net new restaurants. The 2.8% same-restaurant sales mark for the quarter beat the consensus estimate of +2.7%.

The same-restaurant sales growth was led by a 4.1% gain for the Olive Garden chain and 4.9% rise for the LongHorn Steakhouse chain, which offset a 1.7% for the company’s fine dining restaurants.

EPS for the quarter was $1.84 vs. $1.74 consensus and $1.52 a year ago.

Segment profit: Olive Garden $262.5M from $218.9M a year ago, LongHorn Steakhouse $111.8M from $85.6M a year ago, and Fine Dining $56.6M from $38.9M a year ago.

“We continued to profitably grow market share again this quarter as we outperformed industry same-restaurant sales and traffic,” noted Darden (DRI) CEO Rick Cardenas. “We remain focused on managing our business for the long term and driving strong operating fundamentals in our restaurants,” he added.

On the buyback front, Darden Restaurants (DRI) repurchased approximately 1.2M shares of its stock for a total of approximately $181M. As of the quarter, DRI had approximately $328M remaining under the current $1B repurchase authorization.

Looking ahead, Darden Restaurants (DRI) expects full-year sales of $11.5B vs. a prior range of $11.5B to $11.6B and $11.6B consensus. The restaurant company also sees adjusted EPS of $8.75 to $8.90 vs. $8.77 consensus.

Shares of Darden Restaurants (DRI) slipped 0.24% in premarket trading on Friday to $162.70 vs. the 52-week trading range of $131.90 to $173.06.