The company’s shares closed up 14 percent on Thursday.
Based on LSEG’s survey of analysts, what the company reported compared to Wall Street’s expectations:
- Earnings per share: $2.03 adjusted vs. $2.02 expected
- Income: $2.89 billion vs. $2.9 billion expected
Darden reported fiscal second-quarter net income of $215.1 million, or $1.82 per share, up from $212.1 million, or $1.76 per share, a year earlier.
Excluding costs related to the Chuy’s acquisition, the restaurant company earned $2.03 per share.
Net sales rose 6 percent to $2.89 billion.
Darden’s same-store sales rose 2.4 percent, beating StreetAccount estimates of 1.5 percent.
“It looks like consumers are starting to feel a little bit better than they have in prior quarters,” CEO Rick Cardenas said on the company’s conference call.
Consumers with incomes between $50,000 and $100,000 frequent Darden’s restaurants, although higher-income diners have not increased their visits.
According to Cardenas, Darden also saw “significant impacts” from Hurricanes Helene and Milton. But only one restaurant, Cheddar’s Scratch Kitchen in Asheville, North Carolina, is unable to reopen. The restaurant is scheduled to reopen its doors next year.
Longhorn Steakhouse reported a 7.5 percent increase in same-store sales. The casual dining chain has been a top performer in Darden’s portfolio in recent years, winning over customers with both the quality of its food and its prices. Wall Street was expecting the chain to post a 4.1 percent increase in same-store sales.
Olive Garden, which accounts for more than 40% of Darden’s quarterly revenue, saw same-store sales increase 2% in the quarter. According to StreetAccount, analysts were expecting a 1.4 percent increase in same-store sales.
Olive Garden brought back its never-ending Pasta Bowl promotion in the quarter. This time around, customers were likely to spend more by adding a protein. The chain is also piloting Uber delivery at 100 of its restaurants, with the goal of rolling it out to the rest of the footprint after the holidays.
Darden’s fine dining segment, which includes The Capital Grille and Ruth’s Chris Steakhouse, reported a 5.8 percent decline in same-store sales, more than the 2.8 percent drop analysts had expected. The high prices of fine dining chains have scared off many consumers who are trying to spend less at restaurants.
According to Darden CFO Raj Venam, the company’s shift from the fiscal second quarter on the Thanksgiving calendar to the fiscal third quarter this year also hurt fine dining sales. Excluding this impact, as well as weaker sales associated with hurricanes, the fine dining segment’s same-store sales were down just 3.8 percent, an improvement from a 6 percent decline in the prior quarter.
The company’s last remaining segment, which includes Cheddar’s Scratch Kitchen and Yard House, saw same-store sales rise 0.7 percent, according to estimates.
Darden added 39 net new locations as well as 103 Chuy’s restaurants in the quarter. Darden completed it. A $605 million acquisition of Tex-Mex China in October.
The company updated its fiscal 2025 outlook to include Chuy’s results, although the chain won’t be included in its same-store sales metrics until the fiscal fourth quarter in 2026.
The company now expects total sales of $12.1 billion, up from its previous estimate of $11.8 billion to $11.9 billion. Darden reiterated its forecast for net income per share from continuing operations of $9.40 to $9.60.