Darden beats first-quarter estimates on steady casual dining demand
2023.09.21 08:17
(Reuters) – Darden Restaurants (NYSE:) beat quarterly sales and profit estimates on Thursday, helped by higher menu prices, easing cost pressures and steady demand at its casual dining restaurant chains.
However, shares of Orlando, Florida-based Darden were about 1% lower in premarket trade after the company maintained its full-year sales and profit targets.
U.S. restaurant chains have raised their menu prices over the past year in order to wrestle elevated costs linked to labor, produce and raw materials, even as some of those expenses have now come down from their peaks.
Darden has also benefited from keeping its price increases below some of its competitors, attracting more customers to its casual dining restaurant chains amid pressures from higher borrowing costs.
Consolidated same-store sales growth at Darden came in at 5% in the first quarter, well above estimates of 3.74%, boosted by casual dining chains Olive Garden and LongHorn Steakhouse.
Darden’s fine dining same-store sales saw a bigger-than-expected drop of 2.8%, as last year’s growth following reopening of restaurants subsided, with some patrons restricting their spending.
Net sales rose 11.6% to $2.73 billion in the first quarter ended Aug. 27, compared with expectations of $2.71 billion, according to LSEG data.
Excluding items, the company earned $1.78 per share, compared with analysts’ average estimates of $1.74.
Darden’s board also elected Cynthia Jamison as its new chair, succeeding Eugene Lee.
