Darden Restaurants (DRI) Q3 2022 earnings miss estimates
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An Olive Garden restaurant in Times Square in New York.
Richard Levine | Corbis | Getty Images
Darden Restaurants on Thursday reported quarterly earnings and revenue that missed analysts’ expectations as the omicron variant led to disappointing sales for Olive Garden.
It also reduced its fiscal 2022 earnings outlook.
Premarket trading saw Darden shares fall as high as 3%
Based on an analysis of Wall Street analysts, here’s the report from the company.
- Earnings per share: $1.93 vs. $2.10 expected
- Revenues: 2.45 Billion vs. the expected $2.51 Billion
Restaurant company posted fiscal third quarter net income of $247million, which is $1.93 per shares, an increase from the $128.7 million or 98cs per share a year ago. Refinitiv analysts expected earnings per share in the range of $2.10.
Net sales rose 41.3% to $2.45 billion, falling short of expectations of $2.51 billion. Same-store sales increased 38.1% across all Darden’s restaurants chains. StreetAccount estimates show that Wall Street expected total sales growth of 43.5% for the same-stores. Darden’s same store sales declined 26.7% in the past year.
Gene Lee, the outgoing CEO, stated in a statement, that sales were at an all-time high in December before the disruption caused by the micron variant of the virus. This was just after the disruption to customer traffic, staffing levels, and operating expenses. Darden’s restaurants recovered from the downturn as early as February.
Olive Garden accounts for approximately half of Darden’s revenue. It reported same-store growth of 29.9%, missing StreetAccount estimates at 36.7%.
Darden’s fine dining business was also disappointing, even though it reported same-store sales growth at 85.8%. This segment, which includes chain restaurants like The Capital Grille, was hardest affected by the pandemic. Analysts had predicted a growth in sales of the same store at 91.1%.
LongHorn SteakHouse’s same-store sales increased 31.6% during the third quarter. Although the chain saw its sales rebound faster than Olive Garden, it still only makes up about 25% of Darden’s revenues.
Darden reduced its earnings outlook on Thursday after raising it last quarter. The company now expects fiscal 2022 earnings per shared from continuing operations to range from $7.30 to $7.45. That’s down from $7.35 and $7.60.
It also reduced its revenue forecast for fiscal 2022. The sales range for the company is now between $9.55 and $9.62 Billion, as opposed to its earlier range of 9 to 7 billion.
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