Olive Garden parent company Darden dips after serving up a Q1 earnings miss
The restaurant giant saw strong comps, but is facing higher costs and more price-conscious consumers.
Darden Restaurants shares sank more than 9% Thursday morning after the Olive Garden and LongHorn parent company’s first-quarter results came in lighter than expected.
Sales landed at $3.04 billion, just shy of the $3.07 billion expected by analysts polled by FactSet. Adjusted diluted earnings per share came in at $1.97, narrowly below the Street’s $2.00 estimate. Same-store sales rose 4.7%, topping expectations thanks to Olive Garden and LongHorn, while its fine dining segment stayed relatively flat.
Looking ahead, Darden upped its full-year guidance, calling for adjusted EPS of $10.50 to $10.70, sales growth of 7.5% to 8.5%, and plans to open about 60 to 65 new restaurants. Wall Street is forecasting EPS of $10.69 and sales growth of 8.3%.
At Olive Garden, Darden is testing smaller-portioned, lower-priced meals to win over more cost-conscious diners. Already in 40% of locations, the offerings include seven entrees paired with unlimited breadsticks and soup or salad.
After today’s dip, Darden shares are now flat on the year.
