Darden Restaurants Inc (DRI) Reports Growth in Q2 Fiscal 2024 Earnings and Raises Dividend
Total sales rose 9.7% to $2.7 billion in the second quarter, with same-restaurant sales up 2.8%.
Adjusted diluted net earnings per share from continuing operations increased by 21.1% to $1.84.
Darden Restaurants Inc (NYSE:DRI) declared a quarterly dividend of $1.31 per share and repurchased $181 million of its common stock.
The company updated its fiscal 2024 outlook, projecting total sales of approximately $11.5 billion and adjusted diluted net earnings per share from continuing operations of $8.75 to $8.90.
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On December 15, 2023, Darden Restaurants Inc (NYSE:DRI) released its 8-K filing, announcing financial results for the second quarter of fiscal year 2024. The company reported a robust increase in total sales and adjusted earnings per share, alongside a raised quarterly dividend, signaling a strong performance despite the challenges faced in the restaurant industry.
Financial Performance Overview
Darden Restaurants Inc (NYSE:DRI) saw its total sales increase by 9.7% to $2.7 billion, compared to the same quarter last year. This growth was attributed to a 2.8% rise in blended same-restaurant sales and the addition of 78 company-owned Ruth's Chris Steak House restaurants and 45 other net new restaurants. Notably, Olive Garden and LongHorn Steakhouse experienced same-restaurant sales growth of 4.1% and 4.9%, respectively, while Fine Dining and Other Business segments saw declines of 1.7% and 1.1%.
The reported diluted net earnings per share from continuing operations were $1.76. After adjusting for $0.08 of Ruth's Chris transaction and integration-related costs, the adjusted diluted net earnings per share from continuing operations reached $1.84, marking a significant increase of 21.1% from the previous year.
Segment Performance and Shareholder Returns
Segment profit, which excludes non-cash real estate related expenses, showed positive results across the board. Olive Garden's segment profit increased to $262.5 million from $218.9 million, and LongHorn Steakhouse's profit rose to $111.8 million from $85.6 million. The Fine Dining segment, which now includes Ruth's Chris, reported a profit of $56.6 million, up from $38.9 million. Other Business segment profit also grew to $66.5 million from $59.0 million.
Reflecting confidence in its financial health, Darden Restaurants Inc (NYSE:DRI) declared a quarterly cash dividend of $1.31 per share, payable on February 1, 2024, to shareholders of record as of January 10, 2024. The company also continued its share repurchase program, buying back approximately 1.2 million shares for a total of $181 million during the quarter.
Updated Fiscal 2024 Outlook
Darden Restaurants Inc (NYSE:DRI) updated its fiscal 2024 outlook, now expecting total sales of approximately $11.5 billion and same-restaurant sales growth of 2.5% to 3.0%. The company plans to open 50 to 55 new restaurants and anticipates total capital spending of around $600 million. The adjusted diluted net earnings per share from continuing operations are projected to be between $8.75 and $8.90, excluding transaction and integration related costs associated with the acquisition of Ruth's Chris.
President & CEO Rick Cardenas expressed satisfaction with the company's ability to grow market share and maintain strong operating fundamentals.
We continued to profitably grow market share again this quarter as we outperformed industry same-restaurant sales and traffic, said Cardenas. We remain focused on managing our business for the long term and driving strong operating fundamentals in our restaurants.
Investor Relations and Future Outlook
Darden Restaurants Inc (NYSE:DRI) will provide further details during its investor conference call. The company remains committed to its long-term strategy and is poised to navigate the dynamic restaurant industry landscape with its diversified brand portfolio and focus on operational excellence.
For detailed financial tables and further information, investors and interested parties are encouraged to review the full 8-K filing.
Explore the complete 8-K earnings release (here) from Darden Restaurants Inc for further details.
This article first appeared on GuruFocus.
