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By September 26, 2017 0 Comments

Olive Garden Parent’s Earnings Beat, But Here’s Why Its Stock Is Down

Darden Restaurants‘ (DRI) shares fell Tuesday after the parent of Olive Garden and Longhorn steakhouse restaurants reported fiscal first-quarter same-store sales below Wall Street estimates.

XAutoplay: On | OffDarden reported earnings of 99 cents per share on revenue of $ 1.94 billion. Analysts polled by Zacks were expecting EPS of 98 cents on sales of $ 1.93 billion.

But same-store sales only rose 1.7%, below analysts’ estimates for a 2.1% increase. Olive Garden’s comps were up 1.9% but fell short of the 2.5% growth analysts expected. But Longhorn and Capital Grille same-store sales beat expectations.

Darden shares fell 3.5% to 80.24 in premarket trading on the stock market today. Chili’s parent Brinker International (EAT) dipped 0.7%, Cheesecake Factory (CAKE) lost 1%, while Applebee’s parent DineEquity (DIN) was up 1.3%, and Outback Steakhouse parent Bloomin’ Brands (BLMN) was quiet early.

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“Our focus on simplifying operations and providing an excellent value for our core consumer continues to yield strong sales growth,” said Darden CEO Gene Lee said in a statement. “The teams continue to make appropriate investments in their brands and manage costs effectively. These actions have enabled Darden to outperform the industry.”

The restaurant industry has been struggling in recent quarters amid rising food and labor costs. Consumers are also opting to eat at fast-casual restaurants like Panera Bread (PNRA) or cook their food at home.


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