Darden Steady after Upbeat Forecast

Shares of Darden Restaurants, Inc. (NYSE:DRI) are steady in morning trade after the company raised its fiscal third quarter profit outlook. The today reported that it expects diluted net earnings per share from continuing operations for its fiscal third quarter ending February 26, 2012, to be approximately $1.23 to $1.25. Analysts were only expecting a profit of $1.19 per share.

The Company also said that, compared to the prior year, blended U.S. same-restaurant sales for Olive Garden, Red Lobster and LongHorn Steakhouse for the third quarter will increase approximately +4% and blended U.S. same-restaurant sales for the Company’s Specialty Restaurant Group for the third quarter will increase approximately +6%.  Among the Company’s large brands, U.S. same-restaurant sales for the third quarter are estimated to be up approximately +7% at LongHorn Steakhouse, +6% at Red Lobster and +2% at Olive Garden. 

The better than expected results were by driven an earlier start to the Lenten season and mild weather that prompted more people to eat out. Darden’s Red Lobster chain ties its annual LobsterFest promotion to the start of Lent.

The company backed its previous full-year earnings and sales guidance, saying that it still expects its earnings from continuing operations to be up between 4 percent and 7 percent and for its sales to rise between 7 percent and 7.5 percent. This implies adjusted earnings of $3.55 per share to $3.65 per share and sales of between $8.03 billion and $8.06 billion for the fiscal year ending in May 2012. This is at the higher end of analyst estimates that are looking for $3.55 per share in profits on revenues of $8.00 billion.

“We’re pleased with the results we’ve seen thus far in the third quarter,” said Clarence Otis, Chairman and Chief Executive Officer of Darden.  “Each of our brands has solid sales momentum and, as we’ve anticipated for some time now, our year-over-year cost comparisons are trending in the right direction.  As a result, we expect strong earnings growth the second half of the year and are affirming our sales and diluted net earnings per share outlook for the full fiscal year”.

 ”One of the things we can’t control, of course, is weather.  And, certainly, more severe weather than anticipated during the balance of the winter would adversely affect both sales and earnings.  We are, however, confident in our promotional and other strategies and in our underlying momentum.  And we continue to believe that, beyond this fiscal year, we have everything it takes to continue growing market share profitably and continue creating the kind of superior value our shareholders expect.”

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Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.