Olive Garden Parent Delivers Mixed Earnings Report, Darden CEO Says Company Had a ‘Solid Quarter’

Olive Garden parent Darden Restaurants delivered something of a mixed third-quarter earnings report on March 20, according to CNBC, posting a slight earnings beat alongside a similarly modest revenue miss.

Concerning earnings per share (EPS), Darden came in at $2.80 adjusted versus Wall Street expectations of $2.79. Revenue was notched at $3.16 billion against $3.21 billion expected. Per StockStory, EBITDA also registered as a beat, resting at $565.7 million versus analyst projections of $558.2 million.

In light of the report, Darden President and CEO Rick Cardenas maintained a positive outlook and congratulated company staff for their performance.

“We had a solid quarter, and I am proud of how our teams managed their business and controlled what they could control,” he said.

Olive Garden, LongHorn Steakhouse Report Increased Same-Store Sales, but Fail To Meet Expectations

And despite Olive Garden and LongHorn Steakhouse reporting increased same-store sales, the amount of growth in that category failed to reach analyst expectations. Olive Garden grew same-store sales by 0.6% (below expectations of 1.5% growth), while LongHorn Steakhouse saw comparable sales growth of 2.6%, far short of the 5% target.

Darden executives pinned at least a portion of the underperformance on certain metrics to poor weather and low temperatures occurring throughout the quarter ending Feb. 23. Cardenas continued to express general optimism over the company’s near future during an analyst call.

“Even if [consumers] say they’re feeling feeling less optimistic, we haven’t seen a huge correlation between that and dining out,” Cardenas said.

“So I think as long as incomes are going up and outpacing inflation, I think they’re likely to keep spending,” he added.

On the downside, Darden’s fine dining brands — The Capital Grille and Ruth’s Chris Steak House — reported a same-store sales decline of 0.8%.

“We are seeing more persistent check management post-holidays, so I guess we’re not ready to claim victory yet on fine dining. It’s still soft,” Cardenas said.

Darden maintained its full-year forecast of $12.1 billion and slightly narrowed its EPS projections back to a range of between $9.45 and $9.52, tightening an earlier estimate of between $9.40 and $9.60.