Darden Serves Up Better-Than-Expected Quarter - Shares Rise

Darden Restaurants shares firmed after the owner of Olive Garden and other eateries posted better-than-expected results.
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Darden Restaurants  (DRI) - Get Report shares on Thursday firmed after the owner of Olive Garden, Capital Grille and other restaurants posted stronger-than-expected results.

For the fiscal 2020 fourth quarter ended May 31, Darden reported a net loss of $480 million, or $3.86 a share, swinging from net income of $208 million, or $1.67 a share, in the year-earlier quarter.

The company’s adjusted loss per share was $1.24 a share in the latest quarter, better than analysts’ prediction of a $1.63 loss in a survey by FactSet.

Darden registered revenue of $1.27 billion, down 43% from $2.23 billion in the year-ago quarter. The latest figure topped the FactSet consensus estimate of $1.26 billion.

Darden began opening its restaurants’ dining rooms in May. Until then, it relied on to-go sales after closing all its dining rooms March 20, in response to the coronavirus epidemic.

For the first quarter of fiscal 2021, Darden forecasts revenue equaling 70% of last year’s total and earnings from continuing operations at break-even or better. 

For all of fiscal 2021, it expects to open 35 to 40 net new restaurants and have total capital spending of $250 million to $300 million.

"As we shifted to an off-premise-only model, we took a disciplined approach to pursue sales opportunities that drove incremental profitability and cash flow," Chief Financial Officer Rick Cardenas said in a statement.

"This approach … resulted in a better liquidity position than we anticipated earlier in the fourth quarter and is the foundation of our first-quarter financial outlook."

Darden shares recently traded at $74.60, up 5.4%. They have jumped 31% over the past three months.