Darden Restaurants Posts Adjusted EPS Beat as Ruth's Chris Sales Boost Results

By
Bill McColl
Bill McColl
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Bill McColl has 25+ years of experience as a senior producer and writer for TV, radio, and digital media leading teams of anchors, reporters, and editors in creating news broadcasts, covering some of the most notable news stories of the time.

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Published June 20, 2024
Ruth's Chris Steak House restaurant in Charlotte, N.C.

Jeffrey Greenberg / Universal Images Group via Getty Images

Key Takeaways

  • Darden Restaurants beat adjusted profit estimates on the strength of new Ruth's Chris Steak House locations.
  • Same-store sales at the chain's other restaurants were flat.
  • CEO Rick Cardenas said the gains came despite weakening economic conditions that began in the second half of the company's fiscal year.

Darden Restaurants (DRI) shares advanced Thursday after it posted a better-than-expected adjusted profit as it benefited from the acquisition of Ruth’s Chris Steak House.

The operator of Ruth’s Chris, Olive Garden, and other restaurants reported fiscal fourth-quarter fiscal 2024 adjusted earnings per share (EPS) of $2.65, above the $2.61 consensus estimate of analysts compiled by Visible Alpha. Revenue rose 6.8% year-over-year to $2.96 billion, just short of forecasts.

Darden explained that the gains were driven by the addition of 80 Ruth’s Chris locations, and 37 other net new restaurants. Darden purchased Ruth’s Chris last year for about $715 million.

Same-store sales, which didn’t include Ruth’s Chris, were unchanged from the year before. They fell 1.5% at the firm’s biggest operation, Olive Garden, and were down 2.6% at its fine dining locations. Same-store sales increased 4.0% at LongHorn Steakhouse.

CEO Says Results Strong Despite 'Weakening Conditions'

Chief Executive Officer (CEO) Rick Cardenas noted that the results were strong despite “weakening conditions that emerged in the back half of the year.” In March, Darden said third-quarter revenue declined and it lowered its full-year outlook, with Cardenas noting that the company faced “an operating environment that was tougher than we anticipated.”

Darden sees fiscal 2025 adjusted EPS of $9.40 to $9.60, with revenue of $11.8 billion to $11.9 billion. It predicts same-store sales growth of 1.0% to 2.0%.

Shares of Darden Restaurants rose 1.3% to $153.93 as of 10:48 a.m. ET Thursday. They are down 6% year-to-date.

Article Sources
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  1. Darden Restaurants. "Darden Restaurants Reports Fiscal 2024 Fourth Quarter and Full Year Results; Increases Quarterly Dividend; And Provides Fiscal 2025 Outlook."

  2. Darden Restaurants. "Darden Restaurants Completes Acquisition of Ruth's Hospitality Group."

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