#USA #Orlando #Darden Restaurants #Olive Garden #LongHorn Steakhouse

Darden Restaurants Reports Robust Q2 Results

Darden Restaurants, Inc., a leading restaurant operator in the United States, has announced its financial results for the second quarter of fiscal 2025, which ended on November 24, 2024. The results reveal a steady increase in total sales and optimistically reflect Darden's strategic growth initiatives. During Q2, Darden's total sales surged by 6.0% year-over-year, reaching an impressive $2.9 billion. This growth was buoyed by a blended comparable restaurant sales increase of 2.4%, alongside the expansion of its restaurant portfolio with the addition of 103 Chuy's locations and a net increase of 39 restaurants across various brands.

Segment Performance Highlights

Within the consolidated Darden portfolio, each brand displayed resilience and adaptability to market dynamics. Both Olive Garden and LongHorn Steakhouse recorded positive same-restaurant sales growth, indicating strong consumer preference and brand loyalty. Olive Garden's sales increased by 2.0% while LongHorn Steakhouse saw a notable growth of 7.5%. However, the fine dining segment, which includes Ruth's Chris, experienced a decrease of 5.8%. Other business segments also contributed positively with a combined sales increase of 0.7%.

Reported diluted net earnings per share from continuing operations stood at $1.82. When factoring in adjustments for transaction and integration costs related to the acquisition of Chuy's, the adjusted diluted net earnings per share rose to $2.03, reflecting a healthy 10.3% increase compared to the same quarter last year.

Strategic Growth and Shareholder Returns

Darden's strategic focus on expanding its restaurant footprint is evident in its decision to declare a quarterly cash dividend of $1.40 per share. This dividend will be payable to shareholders on February 3, 2025. Additionally, the company executed a share repurchase program during this quarter, buying back approximately 0.9 million shares of its common stock for a total of $142 million. As of now, Darden has around $601 million remaining under its current $1 billion share repurchase authorization, demonstrating a committed approach to enhancing shareholder value.

Fiscal 2025 Outlook

Looking forward, Darden has updated its fiscal 2025 financial outlook, projecting total sales of approximately $12.1 billion while anticipating same-restaurant sales growth of around 1.5%. Furthermore, the company plans to open 50 to 55 new restaurants and allocate about $650 million for capital expenditures.

Darden estimates an inflation rate of about 2.5% for the fiscal year, with an effective tax rate projected to be around 12.5%. The company also expects diluted net earnings per share from continuing operations to be between $9.40 and $9.60, excluding transaction and integration costs related to Chuy's acquisition.

Conclusion

Darden Restaurants continues to leverage its diverse portfolio of brands and adapt to changing market conditions. The company's focus on strategic growth, enhanced shareholder returns, and a strong financial outlook provides a positive trajectory for its future endeavors. Investors and stakeholders can expect Darden to maintain its competitive edge and expand its market presence as it capitalizes on opportunities within the dynamic restaurant industry. For further insights, investors can tune into Darden's upcoming investor conference call.

For additional details on Darden's financial performance and strategic direction, please visit Darden's Investor Relations.