Darden Restaurants, Inc. (NYSE:DRI) stock fell 0.86% (As on September 20, 11:18:32 AM UTC-4, Source: Google Finance) after the company reported first-quarter fiscal 2025 results that missed analyst expectations but the company maintained its full-year outlook and noted improving sales trends. Total sales for Olive Garden decreased by 1.5% due to negative same-restaurant sales of 2.9%, underperforming the industry benchmark by 40 basis points. Olive Garden continues to have strong segment profit margin, delivering 20.6% for the quarter. At LongHorn, total sales increased 6.5%, driven by same-restaurant sales growth of 3.7%, outperforming the industry by 620 basis points. Total sales at Fine Dining segment increased 2%, driven by the addition of eight net new restaurants.
Meanwhile, the Olive Garden team has been working on new dishes to give their guests another reason to visit in the back half of this fiscal year. This includes the return of two guest favorites, Steak Gorgonzola Alfredo and Stuffed Chicken Marsala, which were removed from the menu during COVID. The LongHorn Steakhouse team closed their biggest menu gap with the addition of a healthier chicken dish. Their new lemon garlic chicken has scored extremely well in guest satisfaction ratings. LongHorn also introduced a new dragon fruit margarita during the quarter, made with an exclusive Patrón Reposado Tequila that was specially blended for LongHorn, and it has already become their top-selling margarita. The Yard House team introduced a new pizza platform that has resulted in higher-quality pizzas that are cooked in half the time, and they have seen a significant increase in preference and guest satisfaction as a result.
DRI in the first quarter of FY 25 has reported the adjusted earnings per share of $1.75, missing the analysts’ estimates for the adjusted earnings per share of $1.84. The company had reported the adjusted revenue growth of 1 percent to $2.8 billion in the first quarter of FY 25, missing the analysts’ estimates for revenue of $2.81 billion. This is driven by the addition of 42 net new restaurants and partially offset by negative same-restaurant sales of 1.1%. DRI outperformed the industry again this quarter with same-restaurant sales that were 140 basis points better than the industry and same restaurant guest counts that exceeded the industry by 160 basis points.
The company reiterated its fiscal 2025 outlook, projecting earnings per share of $9.40 to $9.60. This guidance excludes impacts from the pending Chuy’s acquisition.