Darden Restaurants Backs FY18 Outlook After Q1 Earnings Meet Market View

(RTTNews) - Darden Restaurants, Inc., (DRI) on Tuesday reaffirmed its fiscal 2018 outlook for earnings and sales growth after reporting higher earnings in its first quarter, in line with market estimates.

The company continues to expect adjusted net earnings per share from continuing operations in the range of $4.38 to $4.50. Including items, reported earnings would be $4.30 to $4.44 per share.

On average, 25 analysts polled by Thomson Reuters expect earnings of $4.47 per share for the year. Analysts' estimates typically exclude special items.

Total sales growth is still expected to be 11.5 percent to 13 percent. The expected sales growth would be driven by the addition of Cheddar's Scratch Kitchen and other new restaurant openings and same-restaurant sales growth from legacy Darden brands of approximately 1.0 percent to 2.0 percent.

The financial outlook includes the expected full financial impact of Hurricanes Harvey and Irma, the company said.

In its first quarter, net earnings increased to $119 million or $0.93 per share from $110.2 million or $0.87 per share a year ago.

Earnings from continuing operations grew to $121.3 million or $0.95 per share from $111.1 million or $0.88 per share last year.

Adjusted net earnings per share from continuing operations were $0.99.

Total sales increased 12.9 percent to $1.94 billion from prior year's $1.71 billion. Analysts expected earnings of $0.99 per share on sales of $1.93 billion for the quarter.

The sales included 11.2 percent growth from the addition of 141 Cheddar's Scratch Kitchen restaurants and 21 other net new restaurants.

Blended same-restaurant sales from Darden's legacy brands increased 1.7 percent. Same-restaurant sales increased 1.9 percent for Olive Garden, while it declined 1.4 percent for Cheddar's Scratch Kitchen.

In pre-market activity, shares were losing around 1.40 percent to $81.98.