4.7 C
New York

Olive Garden parent Darden Restaurants’ (DRI) Q4 2022 earnings


An Olive Garden restaurant in Silverdale. Darden Restaurants, Inc. which owns Olive Garden and other restaurant chains is scheduled to report its fourth-quarter 2022 earnings on June 23.

Toby Scott | Lightrocket | Getty Images

Darden Restaurants’ quarterly earnings and revenue beat analysts’ expectations, shaking off inflationary pressures as diners returned to LongHorn Steakhouse and The Capital Grille.

Within the face of upper costs and economic uncertainty, Olive Garden’s parent company issued a mixed forecast for fiscal 2023.

CEO Rick Cardenas said that the corporate plans to persist with its strategy of pricing below its rivals and limiting how much of its increased costs it passes on to diners.

“We predict it’s prudent to be cautious and preserve flexibility, slightly than go through some costs that is probably not everlasting,” he said.

This marks Cardenas’s first quarterly report in the highest job. Former CEO Gene Lee retired in May after seven years leading the restaurant company.

Shares of the corporate rose as much as 5% in premarket trading on Thursday but fell 1% after the market opened.

Here’s what the corporate reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:

  • Earnings per share: $2.24 vs. $2.21 expected
  • Revenue: $2.6 billion vs. $2.54 billion expected

Darden reported fiscal fourth-quarter net income of $281.7 million, or $2.24 per share, down from $368.5 million, or $2.78 per share, a yr earlier. Analysts surveyed by Refinitiv were expecting earnings per share of $2.21.

Executives said they do not think the upper costs for key commodities like chicken, dairy and wheat that they are seeing might be everlasting. The corporate said it’s trying to keep up a pricing edge over smaller chains and independent restaurants that may’t absorb costs as easily and are significantly climbing menu prices.

Net sales rose 14.2% to $2.6 billion, topping expectations for $2.54 billion. Across the corporate’s chains, same-store sales climbed 11.7%.

The rise was fueled by the corporate’s fine-dining restaurants, which include The Capital Grille and Eddie V’s and reported same-store sales growth of 34.5%. The unit was hardest hit by the pandemic but its sales surpassed 2019 levels within the fiscal fourth quarter.

Olive Garden, which accounts for nearly half of Darden’s revenue, saw its same-store sales rise just 6.5% within the quarter, below the 7.2% Wall Street expected, based on StreetAccount estimates.

Strong demand for LongHorn Steakhouse helped make up the difference. The steak restaurant chain reported same-store sales growth of 10.6%, beating analysts’ estimates of 5.6%.

For its fiscal 2023, Darden expects earnings per share from continuing operations of $7.40 to $8, falling wanting analysts’ expectations of $8.11. The corporate is assuming that inflation will rise 6% in the brand new fiscal yr. Its revenue outlook of $10.2 billion to $10.4 billion is according to Wall Street’s estimates for $10.22 billion.

Darden can also be expecting same-store sales growth of 4% to six% and 50 to 60 latest restaurant openings in fiscal 2023.

The corporate’s board authorized a latest $1 billion share buyback program. It doesn’t have an expiration date.

Get the latest Sports Updates (Soccer, NBA, NFL, Hockey, Racing, etc.) and Breaking News From the United States, United Kingdom, and all around the world.

Related articles


Recent articles