Shares of Darden Restaurants (DRI) - Get Report were gaining by 7.28% to $81.03 on Tuesday morning, after the restaurant operator announced better than expected 2017 third quarter earnings and that it is buying restaurant brand Cheddar's Scratch Kitchen.
The Olive Garden parent posted earnings of $1.32 per share on revenue of $1.88 billion for the most recent quarter. Analysts had forecast earnings of $1.27 per share on revenue of $1.86 billion.
The company increased its full year EPS outlook to a range between $3.95 and $4, from its previous guidance of $3.87 to $3.97 for the year.
"We continued to gain market share as we outperformed industry same-restaurant sales by a considerable margin again this quarter," CEO Gene Lee said. "Our teams remain incredibly focused on driving strong operating fundamentals."
The company will acquire Cheddar's Scratch Kitchen for $780 million in an all-cash transaction that is expected to close in Darden's fiscal 2017 fourth quarter.
"Cheddar's is a great fit in the Darden portfolio because it complements our existing brands. This addition will also enable Darden to further strengthen two of our most important competitive advantages: our significant scale and our extensive data and insights," Lee added.