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Olive Backyard owner Darden beats earnings estimates, hikes steering as gross sales climb

An Olive Backyard restaurant in Fremont, California, on Sept. 14, 2023.

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Darden Restaurants on Friday reported quarterly earnings that beat expectations and raised its annual steering, helped by gross sales growth at chains similar to Olive Backyard and LongHorn Steakhouse.

Here’s what the firm reported for its fiscal second quarter ending Nov. 26, in comparison with what Wall Avenue was expecting, per a survey of analysts by LSEG, formerly identified as Refinitiv:

  • Earnings per share: $1.84, adjusted vs. $1.74 expected
  • Earnings: $2.73 billion vs. $2.74 billion expected

Sales rose 9.7% from the year-within the past duration, which the firm mentioned was pushed by the inclusion of Ruth’s Chris Steak Home areas and a identical-restaurant gross sales design bigger of 2.8%

Olive Backyard identical-restaurant gross sales catch been up 4.1%, whereas LongHorn Steakhouse saw a 4.9% soar for the quarter. Elegant dining lagged, as gross sales fell 1.7% for the quarter.

“The individual appears to be like to be resilient, nonetheless extra selective,” mentioned CEO Rick Cardenas within the firm’s earnings call Friday.

Folk with family incomes above $200,000 dined out at a elevated fee than final year, nonetheless soundless lower than pre-Covid phases, mentioned Cardenas. Households making below $75,000 dined out less this year, nonetheless catch been eating out extra than earlier to the pandemic, he added.

Chief Financial Officer Raj Vennam also accepted at some point soon of the call that Darden expects the inflation environment to toughen halfway thru the fiscal year. Nonetheless he mentioned restaurant foot traffic is projected to be down for the plump year.

Darden shares catch been down extra than 2% Friday.

Darden carried out its acquisition of Ruth’s Hospitality Neighborhood, owner of chain restaurant Ruth’s Chris Steak Home, in June. The firm will now not consist of identical-retailer gross sales from Ruth’s Chris Steak Home except Darden has owned and operated the restaurant for a 16-month duration.

“We persisted to profitably develop market share again this quarter as we outperformed change identical-restaurant gross sales and traffic,” mentioned Cardenas in an announcement.

The restaurant neighborhood also updated its fiscal 2024 outlook, forecasting adjusted earnings per share of $8.75 to $8.90, up from the firm’s earlier estimate of $8.55 to $8.85, as adversarial to Ruth’s Chris transactions and integration costs. The LongHorn Steakhouse owner also initiatives $11.5 billion in gross sales for the fiscal year, as smartly as 50 to 55 contemporary restaurant openings.

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