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Darden Profits Fall 12 Percent in Fourth Quarter

By  +Follow June 21, 2013 10:21AM
Tickers Mentioned:

red lobsterDarden Restaurants, Inc. (DRI) on Friday reported earnings for the fourth quarter that came up short of Wall Street expectations as expenses rose, although revenues improved as same-store-sales upticked across all the restaurant operator's brands.

For the quarter ended May 26, the Orlando, Florida-based company reported revenue from continuing operations of $2.3 billion, up 11.3 percent from $2.07 billion in the fourth quarter last year. Net earnings from continuing operations totaled $133.3 million, or $1.01 per share, compared to $151.6 million, or $1.15 per share, in the year prior quarter. Darden's acquisition last year of Yard House USA impacted fourth-quarter earnings by $1.9 million, or 1 cent per share.

Analysts were expecting profits of $1.04 per share on revenue of $2.27 billion.

Darden chief executive and chairman Clarence Otis said that growing same-restaurant traffic is a top priority as this key metric had been lagging for Darden compared to the industry. So, the company started matching promotions and addressing affordability in its core menus while boosting its investment in guest experience. The efforts resulted in blended same-store-sales growth at its flagship brands, Red Lobster, Olive Garden and Longhorn Steakhouse, of 2.2 percent for the quarter. Same-store-sales for Darden's specialty restaurant group, which includes Bahama Breeze, Seasons 52, The Capital Grille, Eddie V's and Yard House, increased 2.3 percent.

100 new restaurants were added during the fourth quarter, including 44 Yard House locations (40 from acquisition and 4 news stores). Adding the Yard House restaurants helped revenue from the specialty group jump 64.7 percent to $295 million.

Total costs for the company rose by 14.7 percent to $2.14 billion for the quarter.

For the full fiscal 2013 year, sales increased to $8.55 billion from $8.0 billion in fiscal 2012. Net earnings decreased to $411.9 million, or $3.13 per share, from $475.5 million, or $3.57 per share.

"Looking ahead, we expect a macroeconomic environment that is similar in fiscal 2014 to what it was in fiscal 2013, with slow and uneven recovery in both the overall economy and our industry," commented Otis.

To that end, Darden sees fiscal 2014 net earnings per share to drop by a range of 3 percent to 5 percent compared to fiscal 2013 due to a net negative 33 cents associated with several factors, including costs associated with the Affordable Care Act. Excluding those factors, net earnings per share is anticipated to grow between 4 percent and 6 percent. Total sales are expected to rise between 6 percent and 8 percent, including an additional quarter of sales from Yard House.

Shares of DRI tumbled by 2.6 percent in Thursday trading, closing at $51.23. Shares are up about 16 percent so far in 2013 and are looking to open trading relatively flat on Friday.

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Results for DRI
26 May 15 23:12:04
$DRI: Darden Restaurants, Inc. Analyst Rating Update: http://t.co/F4bnBDfUaB
26 May 15 19:35:14
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26 May 15 15:30:51
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26 May 15 13:32:48
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26 May 15 13:01:45
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26 May 15 09:18:25
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25 May 15 05:28:09
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24 May 15 10:58:15
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23 May 15 14:08:02
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Breaking News Now
23 May 15 08:31:02
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22 May 15 22:14:41
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Duane Stanford
22 May 15 11:46:11
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22 May 15 10:39:17
$DRI Darden - 3/A (Amended Statement of Beneficial Ownership) SEC Filing From our Stock News Alerts App
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22 May 15 09:10:20
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Thomas Collins
22 May 15 09:01:32
$DRI Stock Report on Darden Restaurants Inc (NYSE:DRI) http://t.co/0WWNtpct3O
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22 May 15 08:16:29
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Kym L
21 May 15 16:52:53
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21 May 15 11:08:06
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Josh Friedman
21 May 15 11:01:00
Olive Garden to Debut Back-to-Basics Menu After Activist Fight $DRI http://t.co/UIr8QBn8FF via @business
Nick Turner
21 May 15 10:57:37
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21 May 15 09:52:34
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21 May 15 07:49:12
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21 May 15 07:40:48
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21 May 15 07:21:19
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John Turner
21 May 15 05:02:12
$DRI Darden lays off 30 employees http://t.co/qK9jWE5fST
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20 May 15 23:13:03
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20 May 15 21:40:24
$CMG vs. $PNRA vs. $DRI vs. $DNKN Compared Across 9 Critical Measures http://t.co/cTp5g5bfn8 http://t.co/svO8CSryfa
By  +Follow June 21, 2013 10:21AM



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