The customer arrives at the Olive Garden location in San Antonio, Texas.
Callahan O’Hair | Bloomberg | Getty Images
Darden Restaurants on Friday reported lower-than-expected quarterly sales as analysts expected another wave of pandemic-related dietary restrictions squeezing same-store sales.
In the next quarter, Olive Garden parents expect sales to fall, plunging 30% to 35%.
The company’s stock fell by more than 1% in pre-market transactions.
Here’s a report from the company for the quarter ended November 29, compared to what Wall Street expected, based on an analyst survey by Refinitiv:
- Earnings per share: 73 cents vs. 71 cents forecast
- Revenue: $ 1.66 billion vs. $ 1.69 billion forecast
The company’s second-quarter net income increased from $ 24.7 million (20 cents per share) in the year-ago quarter to $ 96 million (73 cents per share). Analysts surveyed by Refinitiv expected revenue of 71 cents per share.
Net sales It was down 19.4% to $ 1.66 billion, below the $ 1.69 billion forecast. Same-store sales for all brands fell 20.6% during the quarter. The Thanksgiving period, which moved from the third quarter to the second quarter of this year, also affected sales.
Olive Garden, a gem in Darden’s portfolio, saw same-store sales down 19.9%. LongHornSteakhouse, which is in high demand for takeout, reports that same-store sales fell by just 11.1%.
Darden’s luxury dining business, including The Capital Grille, was hit hardest. Same-store sales plummeted 31% in the quarter.
In last quarter’s earnings announcement, CEO Gene Lee said Darden needed states to ease dietary restrictions in order to improve same-store sales. Instead, the governor did the opposite as the number of new Covid-19 cases surged. Approximately a quarter of Darden restaurants closed their dining rooms by December 13, from just 8% of the week’s stores that ended on November 8.
In November and December, Darden’s total same-store sales declined in sequence as more states regained face-to-face dietary restrictions and temperatures dropped. After a 23.4% decline in the week ending November 8, same-store sales fell 36.9% by the week ending December 13.
Darden expects net income per share from 50 to 75 cents of continuing operations in the third quarter. The company reiterated its full-year outlook for 35-40 net new restaurants and total capital expenditures of $ 250- $ 300 million.
Darden also said it would pay shareholders a dividend of 37 cents on February 1.
Darden Restaurants (DRI) Insufficient sales due to higher revenue in the second quarter of 2021
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