DRI also confessed that sales at its Olive Garden, Red Lobster and LongHorn Steakhouse restaurants open a year or longer fell a combined 4.6%. This figure is a key gauge of a restaurant operator's performance, because it excludes results at stores recently opened or closed. The company attributed the fall to severe winter weather.
For the quarter ended on Feb. 24, Darden earned $134.4 million, or $1.02 per share. That's down from $164.1 million, or $1.25 per share, a year earlier. Analysts' consensus estimate was $1.01 per share, so DRI beat the consensus estimate by 1 penny. The big positive had to do with revenue and sales growth.
According DRI's Web site, "Earnings from continuing operations in this year's third quarter were $134.5 million and sales were $2.26 billion, which compare to earnings from continuing operations of $164.1 million and sales of $2.16 billion in the third quarter last year." On Yahoo! Finance, you'll see that "revenue for the specialty restaurant group surged 61%, buoyed by the addition of some Yard House restaurants, as well as new restaurants for The Capital Grille, Bahama Breeze and Seasons 52."
Darden officers stated that revenue at Red Lobster dropped 6%, as it dealt with higher operating expenses and weaker sales at its locations in the U.S. open at least a year. Olive Garden's revenues moved up a smidge and revenue for LongHorn Steakhouse rose almost 7% as both chains had positive sales profits from its new restaurants.Let's take a look at a 1-year chart that doesn't take into account the earnings report released this morning. The share price has moved in lock-step with the quarterly revenue per share, so the uptrend in the stock during the first two months of 2013 was reflected in today's revenue figures, especially the sparkling 61% increase in revenue from its specialty restaurants. DRI data by YCharts
Darden reaffirmed its fiscal 2013 earnings forecast of $3.06 to $3.22 per share. Analysts are forecasting earnings on the upper end of that range at a consensus of $3.17 per share. With a mild weather forecast in the quarter ahead and improving economic conditions, this should be attainable.
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