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Darden Q1 Revenue Improves But Results Miss Expectations

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Darden Restaurants Inc. (NYSE: DRI) reported on Friday that fiscal first quarter income fell steeply as higher labor and food costs cut margin, offsetting improvement in sale-growth. Shares fell as both earnings and revenue missed analysts’ estimations.

The Company anticipates adjusted earnings will fall 3% to 5% in the current fiscal year but it said to have identified areas where significant spending cuts can be made. The Company expects to cut spending by nearly $50 million in the fiscal 2014.

For the latest period, the Orlando Florida based restaurant operator posted a net income of $70.2 million or 53 cents a share down from $110.8 million or 85 cents a share, in the year-earlier quarter.

Analysts’ consensus estimate was for earnings of 53 cents a share, according to a data compiled by Thomson Reuters.

Sales rose 6.1% to $2.16 billion but missed analysts’ expectation of $2.20 billion.

Sales were primarily boosted by its Specialty Restaurant Group, additions of new 46Yard House restaurants. Darden’s biggest chains however struggled.

Same-store-sales, fell 4% at Olive Garden, plunged 5.2% at Red Lobster but rose 3.2% to LongHorn Steakhouse.

Overall, same-store-sales at its biggest revenue generators (Olive Garden, Red Lobster and LongHorn Steakhouse) fell 3.3% in the fiscal first quarter.

Total costs and expenses climbed to $2.07 billion from $1.89 billion, in the same period of last year.

Separately, the restaurant operator announced the Company’s president and Chief Operating Officer, Drew Madsen has decided to retire at the end of the current quarter. Madsen will be succeeded by Gene Lee, who at present, serves as President of Specialty Restaurant Group.

 








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edliston
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.

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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.

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