Darden Restaurants (DRI) reported a 41% jump in profit for the fourth quarter helped by higher sales and an increase in same-restaurant sales from its legacy brands. Despite sales coming in line with consensus, the owner of Olive Garden and other chain restaurants’ earnings exceed market expectations and it guided fiscal 2019 EPS above Street’s view. Following this, the stock climbed 12% in the pre-market trading.
With sales increasing by 10.3% to $2.1 billion, the Orlando, Florida-based company’s earnings jumped by 41% to $174.5 million or $1.39 per share. Adjusted EPS from continuing operations grew 17.8% to $1.39. Blended same-restaurant sales from Darden’s legacy brands increased 2.2%.
Sales benefited from better pricing and different menu-mix. The increase was offset by a decline in same-restaurant traffic due to severe winter weather that negatively impacted same-restaurant sales by 30 basis points.
Looking ahead into fiscal 2019, the company expects sales growth of 4-5% and EPS from continuing operations of $5.40-$5.56. Same-restaurant sales are expected to rise by 1-2% and the company predicts to open 45 to 50 restaurants during the full year. Total capital spending is anticipated to be $425-475 million for the year.
During the fourth quarter, the company witnessed a rise in food and beverage expenses, restaurant labor costs, restaurant expenses, marketing expenses and depreciation and amortization. But it curbed general and administrative expenses that fell by 22.9%. Helped by an increase in sales, Darden was able to manage the 8% increase in operating costs and expenses to a large extent.
For over the past three years, the restaurant operator has returned more than $1.5 billion to its shareholders and during fiscal 2018 it repaid $550 million in the form of dividends and share buybacks. In addition, the board authorized a new share repurchase program of up to $500 million. Darden bought back about 0.3 million shares for about $27 million in the final quarter of 2018.
On June 20, the board lifted quarterly dividend by 19% to $0.75 per common share, payable on August 1, 2018, to shareholders of record on July 10, 2018.
Darden’s shares ended Wednesday’s regular trading session down 1.42% at $93.27 on the NYSE. The stock had been trading between $76.27 and $100.11 for the past 52 weeks.
Latest economic data evoked mixed sentiment this week -- the rebound in economic activity has raised inflation concerns while jobless claims declined for the sixth week in a row. The
Video game retailer GameStop Corp. (NYSE: GME), which has become the talk of the town after the unprecedented stock rally in recent weeks, reported a narrower loss for the first
The steel industry managed to shrug off the pandemic blues earlier than expected as the recovery in industrial activity pushed up demand. With the vaccination drive and the government’s aggressive