ORLANDO, Fla. - Darden Restaurants, Inc. (NYSE:DRI) announced a 6.8% increase in total sales, reaching $3.0 billion for its third quarter ended February 25, 2024. This growth was attributed to the addition of 79 Ruth's Chris Steak House locations and 53 other net new restaurants. However, same-restaurant sales saw a slight decline of 1.0%.
Despite the mixed performance in same-restaurant sales, with Olive Garden down by 1.8% and Fine Dining experiencing a 2.3% decrease, LongHorn Steakhouse bucked the trend with a 2.3% increase. The company reported a net earnings per share from continuing operations of $2.60. After adjusting for transaction and integration costs related to Ruth's Chris, the adjusted diluted net earnings per share rose by 12.0% to $2.62.
Darden's Board of Directors announced a quarterly cash dividend of $1.31 per share, payable on May 1, 2024, to shareholders of record as of April 10, 2024. Moreover, the company repurchased approximately $33 million of its own stock and unveiled a new share repurchase program, authorizing the buyback of up to $1 billion of its common stock.
For the fiscal year 2024, Darden updated its financial outlook, expecting total sales of about $11.4 billion and same-restaurant sales growth of 1.5% to 2.0%. The company plans to open 50 to 55 new restaurants and anticipates total capital spending of around $600 million. Adjusted diluted net earnings per share from continuing operations are projected to be between $8.80 and $8.90, excluding transaction and integration costs associated with Ruth's Chris.
Darden's CEO, Rick Cardenas, expressed pride in the company's performance and its ability to grow sales and profit in a challenging operating environment. He emphasized the company's focus on controlling what it can, leveraging competitive advantages, and executing a back-to-basics operating philosophy for long-term management.
This news is based on a press release statement from Darden Restaurants, Inc.
InvestingPro Insights
Darden Restaurants, Inc. (NYSE:DRI) has demonstrated a robust financial performance with a notable 6.8% increase in total sales in the third quarter, reaching a significant milestone. The company's strategic expansion with the addition of Ruth's Chris Steak House locations and other new restaurants has contributed to this growth. Reflecting on the company's financial health and investor sentiment, InvestingPro data provides some key metrics:
- The company boasts a solid market capitalization of $19.68 billion, indicating its substantial presence in the industry.
- With a Price/Earnings (P/E) ratio standing at 19.79, and an adjusted P/E ratio for the last twelve months as of Q2 2024 at 18.69, Darden is trading at a high multiple relative to near-term earnings growth.
- The dividend yield as of the date provided stands at 3.0%, showcasing Darden's commitment to returning value to shareholders.
In light of the company's financial outlook for fiscal year 2024, it's worth noting two InvestingPro Tips that may be of interest to investors:
- Darden has raised its dividend for 3 consecutive years and has maintained dividend payments for 30 consecutive years, underscoring its reliability and commitment to shareholders.
- Despite the positive sales outlook, 12 analysts have revised their earnings downwards for the upcoming period, which may suggest a cautious approach to the company's near-term earnings potential.
For investors seeking a deeper analysis, there are additional InvestingPro Tips available that can provide further insights into Darden's financials and market position. To explore these insights, visit: https://www.investing.com/pro/DRI. Don't forget to use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. There are 7 more InvestingPro Tips listed on InvestingPro to help investors make more informed decisions.
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