Among the stocks actively trading on Tuesday was Darden Restaurants Inc. (DRI, Financial), which posted earnings for its first quarter of 2018.
Earnings per share of 95 cents were five cents shy of estimates. Revenue of $1.94 billion beat expectations of $1.93 billion and increased 12.9% from the prior-year quarter.
Same-store sales grew 1.7%, below the anticipated 2.1% increase due to the impacts of Hurricanes Harvey and Irma.Â
Shares tumbled more than 5% after the announcement.
By segment, the company’s Olive Garden sales increased 3% year over year to $989.9 million. Fine dining sales increased 7% to $122.2 million. Longhorn Steakhouse sales grew 4.7% to $404.5 million from $386.3 million. Revenues from the other business segment increased 66% year over year to $419.5 million.
CEO Gene Lee said the company's focus on simplifying operations and providing an excellent value for customers fueled sales growth.
"The teams continue to make appropriate investments in their brands and manage costs effectively," he said. "These actions have enabled Darden to outperform the industry."
During the quarter, Darden repurchased approximately 1.2 million shares, worth approximately $100 million, and still has $370 million remaining under the current repurchase authorization.
Looking forward, the restaurant reaffirmed its outlook for total sales growth in the range of 11.5% to 13%. The growth drivers are the acquisition of Cheddar's Scratch Kitchen, which closed in March, some restaurant openings and 1% to 2% same-store sales growth from legacy Darden brands. Despite the negative impacts of Hurricanes Harvey and Irma, the company expects diluted earnings per share between $4.38 and $4.50.
Year to date, the stock is up 8.8%.
Disclosure: The author holds no positions in any stocks mentioned.
