Darden’s stock drops as profit beats, but Olive Garden sales fall more than forecast

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Shares of Darden Restaurants Inc. fell 1.4% in premarket trading Friday, after the restaurant chain reported a better-than-profit, but sales at its Olive Garden restaurants that fell more than forecast. Net income for the quarter to Nov. 29 fell to $96.0 million, or 73 cents a share, from $24.7 million, or 20 cents a share, in the year-ago period. The FactSet consensus for earnings per share was 71 cents. Sales fell 19.4% to $1.66 billion, to miss the FactSet consensus of $1.69 billion. For its largest restaurant chain, Olive Garden sales fell 19.0% to $829.5 million, below the FactSet consensus of $855.4 million, while the same-store sales decline of 19.9% missed expectations of a 17.4% decline. Same-store sales for Darden’s fine dining restaurants fell 31.0% and declined 11.1% for LongHorn Steakhouse. For the fiscal third quarter, the company expects EPS of 50 cents to 75 cents, compared with the FactSet consensus of $1.34, and projects total sales to fall 65% to 70% from last year, while the FactSet consensus of $2.00 billion implies a 14.9% drop. The stock has run up 31.8% over the past three months through Friday, while the S&P 500 has gained 12.1%.
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