This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Darden's Earnings Fall; Stock Follows

Stocks in this article: DRI

NEW YORK (TheStreet) -- Fewer consumers were shopping at malls this summer and it seems that fewer customers were eating at full-service restaurants like Olive Garden and Red Lobster.

Darden Restaurants (DRI), the restaurants' parent company, reported disappointing fiscal first-quarter earnings, fueled by lower same-restaurant sales at its two largest concepts.

Darden reported Friday net income from continuing operations fell 37% to $70.3 million, or 53 cents a share. Estimates were calling for earnings of 70 cents a share from the Orlando-based company, according to Yahoo! Finance.

Darden's first quarter ended on Aug. 25.

Shares were falling 3.5% to $47.57 soon after the market opened Friday.

Sales rose 6.1% to $2.03 billion from the year-earlier period but they were softer than analysts' expectations of $2.2 billion. Darden blamed a 3.3% decline in same-store restaurant sales from Olive Garden, Red Lobster and LongHorn Steakhouse compared to last year.

In addition to its three largest brands, Darden's Specialty Restaurant Group owns concepts such as The Capital Grille, Bahama Breeze, Eddie V's and Yard House.

The company said it plans to reduce annual spending by about $50 million through work force reductions and program spending cuts. For fiscal 2014, the actions will reduce spending by $25 million, offset this year by $10 million in upfront costs related to implementing the plan.

Darden also announced that is Chief Operating Officer Drew Madsen will retire in November, following the company's second quarter. Madsen will be succeeded, effective immediately, by Gene Lee, who currently serves as president of Darden's Specialty Restaurant Group.

Darden said it continues to expect diluted net earnings for the year to decline between 3% and 5%.

"Following our industry's pronounced spikes up and down in same-restaurant sales last winter and spring, the results this summer are further evidence that we can expect sharper sales volatility as the slow and uneven recovery in the economy persists," Chairman and CEO Clarence Otis said in the earnings statement.

The company saw improvement in restaurant sales in August.

"Still, like the rest of the quarter, August was a challenging month on an absolute basis and we have to be prepared for consumers to continue to be cautious in their spending," Otis said.

-- Written by Laurie Kulikowski in New York.

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,759.16 +297.84 1.81%
S&P 500 1,957.91 +30.80 1.60%
NASDAQ 4,467.1840 +84.3370 1.92%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs