Shares of Olive Garden parent slip after sales miss

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Darden Restaurants Inc. shares fell 1.1% in Thursday premarket trading after the Olive Garden parent reported fiscal first quarter sales that missed expectations. Net income totaled $36.1 million, or 28 cents per share, down from $170.6 million, or $1.37 per share, last year. Adjusted EPS of 56 cents was well ahead of the FactSet consensus for 5 cents per share. Sales of $1.53 billion were down from $2.13 billion last year and just below the FactSet consensus for $1.56 billion. Sales at Olive Garden were down 27.7% to $788.2 million, sales at Longhorn Steakhouse fell 16.3% to $376.8 million, and fine dining sales sank 38.9% to $83.1 million. Other names in the Darden portfolio include The Capital Grille, Seasons 52 and Bahama Breeze. Same-restaurant sales for Darden were down 21.9% for the quarter, ahead of the FactSet consensus for a 25.5% drop. Olive Garden same-restaurant sales were down 21.1% and Longhorn Steakhouse was down 11.3%. Darden declared a 30-cents-per-share cash dividend payable on Nov. 2 to shareholders of record as of close of business on Oct. 9. Darden is guiding for fiscal second-quarter sales of 82% of last year’s total of $2.06 billion, or about $1.69 billion, and earnings per share of 65 cents to 75 cents. The FactSet consensus is for sales of $1.77 billion and EPS of 35 cents. Darden stock is down 17.4% for the year to date while the S&P 500 index is up 0.2% for the period.
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