Darden Restaurants Q3 Profit Falls 18% But Beats Expectations (DRI)
Before the opening bell on Friday, restaurant operator Darden Restaurants, Inc. (DRI) reported a 18% decline in third quarter profit, negatively impacted by disappointing sales at Oliver Garden, Red Lobster, and Longhorn Steakhouse. However, the company was able to beat Wall Street expectations.
The Orlando, Florida-based company said that its third quarter net income was $134.5 million, or $1.02 per share, down from $164.1 million, or $1.25 per share, earned a year earlier. According to analysts polled by Thomson Reuters, Darden was expected to earn $1.01 per share in the quarter.
Quarterly sales were up 5% to $2.26 billion from $2.16 billion a year ago. According to analysts’ views, this was in-line with expected revenues.
Despite the rise in total sales, same-restaurant sales at Olive Garden, Red Lobster, and Longhorn Steakhouse decline 4.6% in the quarter. These restaurants, Darden’s stalwarts, have struggled recently to keep up with shifting trends in the food service industry.
However, the company did see some positive data from The Capital Grille, Bahama Breeze, and Seasons 52, as well as recently acquired 40 Yard House restaurants.
Looking ahead, the company reaffirmed is fiscal 2013 outlook of earning $3.06 to $3.22 per share. Analysts expect the company to earn $3.17 per share.
Furthermore, Darden expects total revenue to climb 6% to 7% in 2013 from last year’s revenue of $8 billion; this implies about $8.48 billion to $8.56 billion in revenue. Analysts predict revenue will be 48.52 billion.
Also announced on Friday, the company’s board declared a quarterly dividend payout of 50 cents per share. The dividend will be paid on May 1 with to shareholders of record on April 10.
Darden Restaurants shares were up 28 cents, or +0.57%, during pre-market trading on Friday. The stock is down -6.76% over the past year.
The Bottom Line
Shares of Darden Restaurants (DRI) have a dividend yield of 4.08% based on last night’s closing price of $48.96 and the company’s annualized dividend payout of $2.00 per share.
Darden Restaurants, Inc. (DRI) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.3 out of 5 stars.
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