Same-store traffic slows Darden Restaurants’ growth in second quarter

Darden Restaurants Inc. (DRI) posted its results for the second quarter on Tuesday, Dec. 18, before the opening bell. The LongHorn Steakhouse owner reported a 4.9% rise in consolidated sales of $1.97 billion. Net profit beat estimates at $115.9 million or $0.92 per share, up 29.6% on a reported basis and up 26% on an adjusted basis.

Analysts, on average, expected the company to post earnings of $0.91 per share on revenue of $1.98 billion for the three-month period.

Last week, Darden’s board of directors declared a regular quarterly cash dividend of $0.75 per share on its outstanding common stock, payable on Feb. 1, 2019 to shareholders of record at the close of business on Jan. 10, 2019.

US same-store restaurant sales grew just 3.5% for Olive Garden and 2.9% for LongHorn Steakhouse, as corresponding traffic fell — something that translated to the lower-than-expected top line.

During the quarter, Darden repurchased about 0.6 million shares for a total of $61 million. At quarter-end, the company had about $419 million remaining under the current $500-million repurchase authorization.

The Olive Garden-operator also updated its fiscal 2019 forecast for same-restaurant sales growth to about 2.5% and its outlook for diluted net earnings from continuing operations to $5.60-$5.70 per share.

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