A Rise In Same-Store Sales Boosts Olive Garden Parent's Revenue Outlook

As a result of its quarterly results on Thursday, Darden Restaurants reported accelerated growth in revenue across the board for the second consecutive quarter as a result of its announcement of its revenue outlook for fiscal 2023.

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Compared to their previous forecast, Darden now expects to generate sales of $10.45 billion to $10.5 billion in fiscal 2023, a modest increase from their prior forecast of $10.3 billion to $10.45 billion.

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According to Cardenas, on the company's earnings call on Monday, he believes that some of the company's sales growth has been driven by its strategy of pricing below inflation. He stated that on a quarterly basis, the group's sales have outperformed those of its competitors, and consumers aren't trading down.

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According to Mr. Varda, the current situation is characterized by a tension between what people want and what they are able to afford.

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Yet, he said, due to the fact that eating at restaurants is a luxury usually within consumers' reach, it is a slow process to give it up.

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According to Refinitiv consensus estimates, here is what the company reported for its most recent quarter, in contrast to what Wall Street analysts had expected:

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• Earnings: It was an improvement in earnings per share from $2.25 to $2.34

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• Revenue: $2.79 billion compared to $2.73 billion in the previous year

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An analyst report for the restaurant company released on Thursday indicated a net income of $286.6 million in the company's fiscal third quarter, or $2.34 per share, up from $247 million in the previous quarter, or $1.93 cents per share.

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With a net sales increase of 13.8% to $2.79 billion, all of its brands, including Olive Garden, LongHorn Steakhouse, and The Capital Grille, saw same-store sales growth of 11.7%. As expected by StreetAccount, same-store sales were expected to grow only 9.1%, whereas Wall Street had predicted a 16.4% increase.

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The same-store sales growth of Olive Garden, which accounted for about half of Darden's quarterly revenue, was 12.3%. Darden's fine dining operations, such as The Capital Grille and The Capital Grille, also posted a same-store growth of 11.7%, and LongHorn Steakhouse saw its same-store sales grow by 10.8%.

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According to Cardenas, all of Darden's brands recorded record sales during the third quarter. During the week of Valentine's Day, Olive Garden and LongHorn Steakhouse set new weekly sales records during the quarter.

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During the third quarter of 2016, Darden announced the opening of 35 new net restaurants.

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It is important to note that Darden did not just raise its revenues forecast, but the company also fine-tuned its earnings forecast to a range of $7.85 to $8 a share, up from its previous range of $7 per share. During the same period, the company raised its inflation forecast from 7% to 7.5%, up from its previous range of 7%.

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With a view to fiscal 2024, Darden is forecasting 50 to 55 new locations opening and spending $500 thousand to $550 thousand on capital investments, and the company is also forecasting inflation in the low single digits largely because of higher prices for beef and produce.