Darden Restaurants, Inc. (DRI), the leading casual dining restaurant operators, recently updated its guidance for the third quarter of fiscal 2013 and fiscal 2013. The company is scheduled to report its third quarter earnings on Friday, March 22, 2013.
Third-Quarter Fiscal 2013 Outlook
The company projects its diluted earnings from continuing operations to be within $1.00 and $1.02 per share in the third quarter. The Zacks Consensus Estimate for the quarter is $1.01 per share.
The company owns and operates restaurant chains, primarily under the names of Red Lobster, Olive Garden, LongHorn Steakhouse and The Specialty Restaurant Group. The company expects that the blended same-store sales (comps) for its three core brands -- Olive Garden, Red Lobster and LongHorn Steakhouse in U.S. – will be down 4.5%, primarily due to bad weather condition, while the same for the company's Specialty Restaurant Group will be up 2.0%.
Fiscal 2013 Outlook Updated
Orlando, Florida-based Darden has also reduced its fiscal 2013 sales growth guidance from 7.5%-8.5% to 6%-7% based on a negative 1.5%-2.5% blended same-store sales growth estimate for its three core brands. However, the sales in the quarter are expected to get a boost from the company’s Yard House USA Inc. acquisition and new unit openings.
The company now projects that its earnings from continuing operations will be within $3.06 and $3.22 per share in fiscal 2013, down from the previously provided guidance range of $3.29–$3.49 per share. The revised earnings guidance includes the costs associated with the acquisition of Yard House of 9 cents.
The company is trying effortlessly to enhance its traffic growth through improving its menus and other services.
During the second quarter of fiscal 2013, the company posted earnings from continuing operations of 26 cents per share, lower than the year-ago earnings of 41 cents per share. Slowdown in comps in three of Darden’s concepts was the key takeaway from Darden’s second quarter earnings results.
Darden currently retains a Zacks Rank #3 (Hold). Another restaurateur Red Robin Gourmet Burgers Inc.’s (RRGB) adjusted earnings in the fourth quarter of 2012 were way ahead of the Zacks Consensus Estimate as well as the year-ago quarter’s earnings. Red Robin Gourmet currently carries a Zacks Rank#1 (Strong Buy).
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