Olive Garden parent raises outlook

Darden Restaurants on Friday reported quarterly earnings and revenue that beat Wall Street’s expectations, as consumers continued to eat out despite pressure from inflation.

The company also raised its earnings outlook for fiscal 2023 to a range of $10.3 billion to $10.45 billion from its previous range of $10.2 billion to $10.4 billion.

Shares of Darden closed down about 2% amid broader market losses Friday.

Here’s what the company reported for the fiscal second quarter ended Nov. 27, compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:

• Earnings per share: $1.52 adjusted vs. $1.44 expected.
• Revenue: $2.49 billion vs. $2.43 billion expected.

Darden’s total sales rose 9.4% compared with the same quarter last year.

Darden also said its total expenses jumped to $2.25 billion from $2.03 billion a year earlier, driven primarily by higher costs for dairy, grains and produce. The company also cited construction and labor costs as reasons for the jump in expenses.

CEO Rick Cardenas said in the company’s earnings release he’s pleased with the company’s results during the quarter and said all of their brands “performed at a high level,” saying that the company “surpassed $10 billion in sales on a trailing 52-week basis for the first time in Darden’s history.”

Olive Garden, which accounts for nearly half of Darden’s revenue, saw same-store sales increase 7.6%, while overall same-store sales rose 7.3% for the company. The company saw a similar increase of 7.3% for LongHorn Steakhouse, its second biggest brand.

Executives on the conference call said sales reached an all-time high on Thanksgiving across its restaurants and they expect sales to continue to do well during the holiday season.

Darden said it had 1,887 locations open as of the end of the quarter, compared with 1,852 last year.

Read the full earnings report here.