Darden Restaurants Shares DROP, Slow Economy to BLAME
Casual dining chain Darden Restaurants Inc (NYSE:DRI) reported in-line earnings for its fourth quarter, but shares tanked over 3 percent on concerns over the chain’s forecast of sluggish, same-restaurant sales for the year.
The forecast was driven by a slow economic recovery seen through 2013, tighter spending by consumers and gas prices.
A Closer Look: Darden Restaurants Earnings Cheat Sheet>>
Brad Richmond, Darden’s chief financial officer, said in a statement: “Given our expectation that economic recovery will continue to be frustratingly slow in fiscal 2013, we are assuming blended same-restaurant sales growth for the year for our three large casual dining brands.” Combined same-restaurant sales at the chain’s flagship brands, Olive Garden, LongHorn Steakhouse, and Red Lobster declined 1.9 percent.
Overall sales in the fourth quarter rose 3.8 percent to $2.07 billion with earnings of $151.6 million ($1.15 a share) compared to $138 million ($1 per share) in the previous year. Analysts had expected earnings per share of $1.15 on sales of $2.11 billion.
The company expects sales to grow by $480 million to $560 million for fiscal 2013 with earnings expected to grow 8 to 12 percent.
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