Darden Restaurants posted stronger-than-expected earnings in its latest quarter, helped by climbing same-store sales at its Olive Garden chain.
Continue Reading Below
The company boosted its earnings forecast for the year, and shares rose 4.8% to $64.30 in premarket trading.
Performance at Darden, which also operates other brands such as LongHorn Steakhouse, has improved recently since its once-struggling Olive Garden chain has simplified operations, from refining food preparation to reducing the number of items on the menu.
The company now expects per-share profit of $3.87 to $3.97, up from its prior range of $3.80 to $3.90 a share. It backed its outlook for full-year same-store sales growth between 1% to 2%.
In the three months ended in August, Darden's overall same-store sales grew 1.3%. Analysts, polled by Consensus Metrix, expected a 1.4% increase.
Olive Garden continued to show strength in its turnaround, as same-restaurant sales rose 2% during the quarter. Investment firm Starboard Value LP had pushed for many changes at the casual Italian chain after it won a board coup in Oct. 2014. Starboard CEO Jeffrey Smith stepped down in April as Darden's chairman, saying the company was on a good path.
Over all, for its first quarter, Darden reported a profit of $110.2 million, or 87 cents a share, compared with $86.4 million, or 67 cents, a year earlier. Analysts had forecast per-share earnings of 82 cents.
Revenue rose 1.6% to $1.71 billion. Analysts expected $1.72 billion.
Write to Joshua Jamerson at firstname.lastname@example.org