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Darden Reverses Losses as Solid Guidance Offsets Sluggish Sales

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By Dhirendra Tripathi

Investing.com – Shares of Darden Restaurants (NYSE:DRI) reversed initial losses in Thursday’s premarket trading after slightly better-than-expected guidance for the coming year offset disappointment over sluggish sales and rising costs.

For the ongoing fiscal 2022, the company sees total sales of approximately $9.2 billion to $9.5 billion. Diluted net EPS is seen between $7 and $7.50, the midpoint of which is fractionally above the consensus of $7.21.

Consolidated same-restaurant sales for the quarter ended May 30 were 0.5% below the 2019 level, despite rising 80% on a year-on-year basis.

Total sales of $2.28 billion were driven by a blended same-restaurant sales increase of 90% and the addition of 30 net new restaurants.

While earnings rose, costs accelerated too. Inflation in food and beverages was sharp as they rose to $663.1 million from $396.5 million in the same quarter last fiscal. Higher wage costs hurt too.

Adjusted diluted net earnings per share was $2.03 compared to a net loss per share of $1.24 last year.

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