Darden Restaurants on Friday reported quarterly revenue that fell short of analysts' expectations as another wave of pandemic-related dining restrictions weighed on its same-store sales.
Next quarter, the Olive Garden parent expects sales to worsen, plunging 30% to 35%.
Shares of the company fell more than 1% in premarket trading.
Here's what the company reported for the quarter ended Nov. 29 compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:
- Earnings per share: 73 cents vs. 71 cents expected
- Revenue: $1.66 billion vs. $1.69 billion expected
The company reported fiscal second-quarter net income of $96 million, or 73 cents per share, up from $24.7 million, or 20 cents per share, a year earlier. Analysts surveyed by Refinitiv were expecting earnings of 71 cents per share.
Net sales dropped 19.4% to $1.66 billion, missing expectations of $1.69 billion. Same-store sales across all of its brands fell 20.6% during the quarter. Sales were also impacted by the timing of Thanksgiving, which shifted from its fiscal third quarter to its fiscal second quarter this year.
Olive Garden, the gem of Darden's portfolio, saw its same-store sales fall 19.9%. LongHorn Steakhouse, which has seen strong demand for its takeout, reported same-store sales declines of just 11.1%.
Darden's fine dining business, which includes The Capital Grille, was hardest hit. The segment's same-store sales plunged 31% in the quarter.
During the previous quarter's earnings call, CEO Gene Lee said that Darden needed states to loosen their dining restrictions in order to improve same-store sales. Instead, as new Covid-19 cases surged, governors did the opposite. Roughly a quarter of Darden restaurants had closed their dining rooms by Dec. 13, up from just 8% of its locations in the week ended Nov. 8.
In November and December, Darden's combined same-store sales fell sequentially as more states brought back restrictions on in-person dining and temperatures grew colder. After falling just 23.4% in the week ended Nov. 8, same-store sales had declined 36.9% by the week ended Dec. 13.
For its fiscal third quarter, Darden is anticipating net earnings per share from continuing operations of 50 cents to 75 cents. The company reiterated its full-year outlook of 35 to 40 net new restaurants and total capital spending of $250 million to $300 million.
Darden also said it would pay a 37-cent dividend to shareholders on Feb. 1.
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