Darden Restaurants (DRI) Q1 2024 earnings

Darden Restaurants on Thursday reported first-quarter earnings and revenue that beat analysts’ expectations as owner of Ruth’s Chris Steak House.

But same-store sales for Darden’s fine-dining segment fell more than expected, indicating that consumers are spending less on upscale restaurant meals.

The company’s shares fell more than 1% in pre-market trading.

Here’s what the company reported for the quarter ending August 27 compared to what Wall Street was expecting, based on a survey of analysts conducted by LSEG, formerly known as Refinitiv:

• Earnings per share: $1.78 adjusted versus $1.74 expected
• Revenue: $2.73 billion versus $2.71 billion expected

Darden reported fiscal first-quarter net income of $194.5 million, or $1.59 per share, up from $193 million, or $1.56 per share, a year earlier.

Excluding its acquisition of Ruth’s Chris, integration costs related to the deal and other items, the restaurant company had earnings of $1.78 per share from continuing operations.

Net sales increased by 11.6% to $2.73 billion.

Darden’s same-store sales, excluding Ruth’s Chris sales, rose 5% during the quarter.

The company will not include Ruth’s Chris in its same-store sales results until after it has owned the steakhouse chain for 16 months. The $715 million acquisition was completed in mid-June.

LongHorn Steakhouse was the best performer in Darden’s portfolio during the quarter. The chain reported same-store sales growth of 8.1%, beating StreetAccount estimates of 6.1%.

Olive Garden, which accounts for approximately 45% of Darden’s revenue, reported same-store sales growth of 6.1%, meeting expectations.

Darden Fine Dining saw same-store sales contract by 2.8%, more than expectations for a 1.8% decline. This segment includes The Capital Grille and Eddie V’s, but the same-store sales measure does not yet include Ruth’s Chris.

Darden also reiterated its outlook for fiscal 2024. The company expects net sales of $11.5 billion to $11.6 billion, same-store sales growth of 2.5% to 3.5%, and adjusted earnings per share from continuing operations of $8.55 to $8.85.