By Senad Karaahmetovic
Darden Restaurants (NYSE:DRI) reported better-than-expected results to send its shares modestly higher in pre-market Friday.
The company, which operates restaurant chains Olive Garden and LongHorn Steakhouse, posted FQ2 EPS of $1.52 on revenue of $2.49 billion (up 9.4% year-over-year), beating the average analyst consensus for earnings of $1.43 per share on revenue of $2.43B.
Comparable sales at Olive Garden and LongHorn increased by 7.6% and 7.3%, respectively. Overall, the company said it exceeded $10B in sales on a trailing 52-week basis for the first time in its history.
Darden’s new guidance sees full-year EPS in the range of $7.60 and $8.00, beating the consensus of $7.71. Full-year revenue is seen between $10.3B and $10.45B, again higher than the consensus of $10.31B. Comparable sales are expected to increase in the range of 5%-6.5% while analysts were expecting DRI to guide for a 4.7% increase.
Darden was previously calling for revenue and comparable sales in the range of $10.2B - $10.4B and 4%-6%, respectively.
Cowen analysts reflected positively on Darden’s FQ2 results and raised guidance.
“We are pleased with Olive Garden's acceleration and LongHorn's stability in a tough backdrop for lower income consumers that led to a top-line driven EPS beat. DRI raised 2023 EPS guidance to $7.60-$8 from $7.40-$8, driven by a stronger SSS outlook and lower tax rate & share count, offset by 1% higher total inflation. We believe DRI is setting the stage to continue to beat & raise in 2023,” they said in a client note.
Goldman Sachs analysts added:
“We expect the stock to outperform today given F2Q beat, strong SSS trends at OG, and guidance raise.”