Darden Restaurants Inc. (NYSE: DRI) reported better-than-expected earnings for the first quarter of 2020 but sales came in shy of forecasts. The stock was down 1.7% in premarket hours on Thursday.
Total sales rose 3.5% year-over-year to $2.13 billion but missed estimates of $2.14 billion. Blended same-restaurant sales rose 0.9%. The quarterly sales results were driven by the addition of 40 net new restaurants and growth in same-restaurant sales.
Net income was $170.6 million, or $1.37 per share, compared to $166.2 million, or $1.32 per share, last year. Analysts had forecast EPS of $1.36.
During the quarter, Darden reported sales increases across all its segments. Same-restaurant sales increased in the Olive Garden, LongHorn Steakhouse, The Capital Grille and Eddie V’s segments while Cheddar’s Scratch Kitchen, Yard House, Seasons 52 and the Bahama Breeze divisions reported decreases. Olive Garden saw a 0.8% drop in same-restaurant traffic while LongHorn Steakhouse posted a 0.3% increase.
Darden declared a quarterly dividend of $0.88 per common share, payable on November 1, 2019 to shareholders of record on October 10, 2019. The Board also authorized a new share repurchase program allowing the company to buy back up to $500 million of its common stock.
For fiscal year 2020, Darden expects total sales growth of 5.3% to 6.3%, including approx. 2% growth related to the 53rd week. Same-restaurant sales growth is expected to be 1-2%. The company expects EPS from continuing operations to be $6.30-6.45. Darden expects approx. 50 gross and 44 net new restaurant openings in the year.