Darden Restaurants Inc. (NYSE: DRI) beat earnings estimates for the fourth quarter of 2019 but sales fell short of forecasts, causing the stock to slide 4.6% during premarket hours on Thursday.
Total sales grew 4.5% year-over-year to $2.23 billion, helped by the addition of 39 new restaurants and a blended same-restaurant sales increase of 1.6%, but came in shy of estimates of $2.24 billion.
Reported net income was $208 million, or $1.67 per share, compared to $174 million, or $1.39 per share, in the year-ago period. Adjusted EPS from continuing operations increased 26.6% to $1.76, beating forecasts of $1.72.
During the quarter, Darden reported sales and profit increases across all its business segments. The company also recorded same-restaurant sales growth across its Olive Garden, LongHorn Steakhouse, The Capital Grille and Eddie V’s brands. However, same-restaurant sales declined in the Cheddar’s Scratch Kitchen, Yard House, Seasons 52 and Bahama Breeze brands.
Fiscal 2020 is a 53-week fiscal year and Darden’s outlook includes the impact of the additional week. For fiscal 2020, the company expects total sales growth of 5.3-6.3%, including approx. 2% growth related to the 53rd week.
Same-restaurant sales is expected to grow 1-2%. Diluted EPS from continuing operations is expected to be $6.30-6.45. Darden anticipates approx. 50 gross and 44 net new restaurant openings during the year.
Darden increased its quarterly dividend by 17% to $0.88 per common share. The dividend is payable on August 1, 2019 to shareholders of record on July 10, 2019.
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