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Shares of Olive Garden parent Darden skid after revenue miss

Shares of Olive Garden parent Darden skid after revenue miss

BUSINESS NEWS

Shares of Olive Garden parent Darden skid after revenue miss

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An Olive Garden restaurant in Laguna Hills, California

Scott Mlyn | CNBC

Shares of Darden Restaurants slid nearly 5% in premarket trading Thursday after its earnings report showed that declining traffic to Olive Garden, its top chain, resulted in weaker-than-expected revenue for its fiscal fourth quarter.

The restaurant company’s stock, which has a market value of $14.4 billion, has risen 20% over the last year.

Darden said foot traffic to Olive Garden locations open at least a year fell 0.4% during the quarter ended May 26. The Italian food chain, which accounts for roughly half of Darden’s net sales, reported same-store sales growth of 2.4%.

Overall same-store sales growth across all of Darden’s restaurants, including LongHorn Steakhouse and The Capital Grille, was 1.6% during the quarter, missing analysts’ estimates of 2.3%.

Fiscal fourth-quarter revenue increased 4.5% to $2.23 billion but fell short of Wall Street’s estimates. Analysts surveyed by Refinitiv were expecting the company to report net sales of $2.24 billion.

Despite missing estimates on revenue, Darden topped expectations for its quarterly earnings. The company reported adjusted earnings per share of $1.76, beating Wall Street’s estimates of $1.73.

“I’m pleased with the results we achieved during the fourth quarter, which wrapped up another strong year of sales and profit growth for Darden,” CEO Gene Lee said in a statement.

Darden also released its fiscal 2020 forecast Thursday. The company is expecting same-store sales growth of 1% to 2% and net earnings per share in a range of $6.30 to $6.45, with 15 cents related to the fiscal year containing 53 weeks.

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