Warning: call_user_func_array() expects parameter 1 to be a valid callback, function 'mh_edition_lite_featured_image' not found or invalid function name in /home/soundsector/public_html/wp-includes/class-wp-hook.php on line 298
Darden Restaurants Inc has posted earnings that were stronger than had been expected for its third quarter that were helped by increased sales at same-restaurants at Olive Garden its flagship chain.
The company increased its forecast for earnings for 2016, though results will be helped by a lower number of outstanding shares, as the businesses’ board authorized a new buyback program for shares valued at over $500 million. Stock at Darden’s rose over 6% in trading before the opening bell on Tuesday.
Darden’s, which is also the operator of other restaurant brands like LongHorn Steakhouse, saw its performance improved recently.
This came after its once struggling Italian restaurant chain Olive Garden simplified its entire operation, from reducing how many overall items it has on its menu to refining its food preparation.
Darden is now expecting its profit per share to be between $3.87 and $3.97, which is up from its prior forecast range of between $3.80 and $3.90.
Darden also reconfirmed its outlook for growth in same-restaurant sales for the full year of between 1% and 2%.
Over the three-month period that ended during August, Darden’s overall sales at same-restaurants grew by 1.3%. Analysts were expecting that metric to increase by just over 1.4%.
Olive Garden has continued to show more strength in its overall turnaround. Sales at its same restaurants were higher by 2% during the August ending quarter.
Starboard Value an activist investor had pushed the casual Italian chain to make a number of changes after was victorious in a board coup during October of 2014.
Jeffrey Smith the CEO at Starboard stepped down during April of 2015 as the chairman of Darden saying that the company was now on a good path of growth.
Overall, for the first quarter, Darden posted a $110.1 million profit equal to 87 cents per share, in comparison to an $86.4 million profit equal to 67 cents per share for the same period one year ago.
Earnings from its continuing operations reached 88 cents per share, while analysts were forecasting earnings per share of just 82 cents per share.
Revenue at the restaurant operator increase by 1.6% to end the quarter at $1.71 billion. Analysts on Wall Street were expecting revenue to reach more than $1.72 billion.
Companies that run their operations on the calendar year and not fiscal year will be starting to post their third quarter earnings over the next month, with Alcoa making the unofficial start to earnings season next week.