Guests arrive at an Olive Garden location in San Antonio, Texas.
Callaghan O’Hare | Bloomberg | Getty Images
Darden Restaurants reported quarterly revenue on Friday that fell short of analysts ’expectations as another wave of pandemic-related restrictions affected its sales at the same store.
Next quarter, Olive Garden’s parent company expects sales to worsen, falling from 30% to 35%.
The company’s shares fell more than 1% in premarket trading.
This is what the company reported during the quarter ended Nov. 29 compared to what Wall Street expected, according to a survey by Refinitiv analysts:
- Earnings per share: 73 euro cents compared to the expected 71 cents
- Revenue: $ 1,666 million versus projected $ 1,696 million
The company reported second-quarter net tax revenue of $ 96 million, or 73 cents per share, above $ 24.7 million, or 20 cents per share, a year earlier. Analysts polled by Refinitiv expected earnings of 71 cents per share.
Net sales it fell 19.4% to $ 1.666 billion, and missed expectations of $ 1.69 billion. In-store sales of all of its brands fell 20.6% during the quarter. Sales were also affected by the time of Thanksgiving, which went from its third fiscal quarter to the second fiscal quarter of this year.
Olive Garden, the jewel in Darden’s portfolio, saw its sales at the same store fall 19.9%. LongHorn Steakhouse, which has seen strong demand for its purchase, recorded in-store sales drops of just 11.1%.
Darden’s food business, which includes The Capital Grille, was the hardest hit. Sales at the same store in the segment fell 31% in the quarter.
During the previous quarter’s earnings call, CEO Gene Lee said Darden needed states to ease gastronomic restrictions to improve sales at the same store. Instead, as new cases of Covid-19 emerged, the governors did the opposite. About a quarter of Darden’s restaurants had closed their dining halls on Dec. 13, with only 8% of their locations in the week ending Nov. 8.
In November and December, combined sales from Darden’s own stores fell sequentially as more states returned food restrictions in person and temperatures cooled. After falling just 23.4% in the week ended Nov. 8, sales at the same store had dropped 36.9% in the week ended Dec. 13.
For its third fiscal quarter, Darden expects net earnings per share from continuing operations of 50 to 75 cents. The company reiterated its full-year outlook of 35 to 40 new net restaurants and a total capital expenditure of between $ 250 million and $ 300 million.
Darden also said he would pay a 37-cent dividend to shareholders on Feb. 1.