Olive Garden parent Darden's earnings buoyed by addition of 77 Ruth's Chris Steak Houses locations

By Ciara Linnane

Sales rose 11.6% while same-restaurant sales rose 5%

Darden Restaurants Inc., parent company of brands including Olive Garden, LongHorn Steakhouse and Yard House, posted better-than-expected fiscal first-quarter earnings on Thursday, boosted by the addition of 77 restaurants from Ruth's Chris Steak House, which it acquired in June.

The company (DRI) had net income of $194.5 million, or $1.60 a share, for the quarter to Aug. 27, up from $193.0 million, or $1.56 a share, in the year-earlier period. Adjusted per-share earnings came to $1.78, ahead of the $1.74 FactSet consensus.

Sales rose to $2.731 billion from $2.446 billion, and were also ahead of the $2.709 billion FactSet consensus.

Blended same-restaurant sales rose 5% to top the FactSet consensus for a rise of 3.8%.

The company backed its full-year guidance for fiscal 2024 and said it still expects adjusted EPS of $8.55 to $8.85.

Raymond James said the numbers exceeded its expectations thanks to strength at Olive Garden and Longhorn, slightly lower-than-expected commodity inflation and sold flow through in labor and other operating costs.

Raymond James has an outperform rating on the stock.

The stock was down 1% but has gained 8% in the year to date, while the S&P 500 SPX has gained 15.7%.

-Ciara Linnane

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09-21-23 1347ET

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