Darden Restaurants (DRI) Q4 2023 earnings

Darden Restaurants on Thursday reported quarterly earnings that topped Wall Street’s expectations.

The company also announced that former CEO Gene Lee plans to step down as chair of the board. Lee retired a little over a year ago.

Shares of the company fell more than 1% in premarket trading.

Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:

• Earnings per share: $2.58 vs. $2.54 expected
• Revenue: $2.77 billion, meeting expectations

Darden reported fiscal fourth-quarter net income of $315.1 million, or $2.58 per share, up from $281.7 million, or $2.24 per share, a year earlier.

Net sales rose 6.4% to $2.77 billion.

The company’s same-store sales increased 4%, led by strong performance by LongHorn Steakhouse. The steakhouse chain reported same-store sales growth of 7.1%, topping StreetAccount estimates of 4.9%.

But Olive Garden, which accounts for roughly 45% of Darden’s sales, reported weaker-than-expected performance for the quarter. The Italian chain’s same-store sales rose 4.4%, falling short of expectations of 5% growth.

Darden’s results for the quarter ended May 28 do not include its $715 million purchase of Ruth’s Chris Steak House. The company completed the acquisition June 14.

Looking forward to fiscal 2024, Darden is forecasting 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.

Its earnings outlook excludes about 34 cents per share, after tax, of expenses related to the Ruth’s Chris integration. The rest of its fiscal 2024 forecast includes Ruth’s Chris’s operating results.

The restaurant company is also anticipating capital spending of $550 million to $600 million and total inflation of 3% to 4%.