Key Takeaways
Shares of Darden Restaurants (
DRI
) surged 14% Thursday to lead
S&P 500
gainers as the company’s fiscal 2025 second-quarter sales and adjusted profit beat expectations on strong LongHorn Steakhouse results.
Darden—which operates LongHorn, Olive Garden, Ruth’s Chris, and other restaurant chains—recorded
net income
of $215.1 million, or $1.82 per share, on
revenue
of $2.89 billion. According to estimates compiled by Visible Alpha, analysts expected profit of $239.5 million, or $2.02 per share, on revenue of $2.86 billion.
Darden reported adjusted
earnings per share (EPS)
of $2.03, two cents above expectation.
LongHorn Growth Driving Sales
Same-restaurant sales
surged 7.5% year-over-year at LongHorn, well above the 4.3% growth analysts expected. Olive Garden same-restaurant sales also rose more than expected at 2%, but its fine dining operations declined 5.8%, nearly double the 3% drop analysts anticipated.
LongHorn’s performance has been
strong throughout the year
. Executives have said that consumers have been willing to spend on things like a steakhouse meal when they feel they are getting their money’s worth.
Darden updated its fiscal 2025
outlook
, lifting its revenue projection to about $12.1 billion from the prior range of $11.8 billion to $11.9 billion. The company is expecting same-restaurant sales growth of 1.5% on the year, narrowed from 1% to 2%, while keeping its
earnings per share (EPS)
from continuing operations outlook at $9.40 to $9.60.
With today’s gains, Darden shares moved into positive territory for the year.
Read the original article on
Investopedia
