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Darden Restaurants Reports Fiscal 2025 Third Quarter Results

Darden Restaurants, Inc. (NYSE: DRI) today announced its financial results for the third quarter ending February 23, 2025. The company reported a notable increase in total sales, which rose by 6.2% to reach $3.2 billion. This surge was primarily driven by a 0.7% increase in same-restaurant sales and the recent acquisition of 103 Chuy's restaurants along with 40 new outlets.

Financial Performance

During this quarter, Darden's diluted net earnings per share from continuing operations were reported at $2.74. When accounting for $0.06 attributed to Chuy's transaction and integration costs, the adjusted figure rose to $2.80, marking a robust increase of 6.9%. The company's proactive stock repurchase plan also played a crucial role, with $53 million of outstanding shares repurchased during this time.

In a statement, Darden’s President and CEO, Rick Cardenas, shared his pride in the company's performance, remarking, “We had a solid quarter, and I am proud of how our teams managed their business and controlled what they could control.” He noted that several brands achieved record sales during the holiday season and on Valentine’s Day, further demonstrating the strength of Darden's brand portfolio and customer loyalty.

Segment Analysis

Darden's financial performance was complemented by positive results across multiple segments:

• - Olive Garden: Total sales increased from $1.31 billion last year to $1.33 billion, with a profit contribution of $306.6 million.
• - LongHorn Steakhouse: Sales rose to $768.1 million, generating a segment profit of $149.3 million.
• - Fine Dining: This segment recorded sales of $385.3 million, up from $372.9 million, contributing $86.1 million in profits.
• - Other Businesses: Including the newly acquired Chuy's, sales in this segment increased to $674.3 million, netting a profit of $104.0 million.

The overall picture highlighted total year-to-date sales at $8.81 billion, reflecting a strong upward trajectory compared to the previous year.

Dividend Announcement

In line with its strong performance, Darden's Board of Directors declared a quarterly dividend of $1.40 per share, scheduled for payment on May 1, 2025, to shareholders of record as of April 10, 2025.

Future Outlook

Looking forward, Darden has updated its financial outlook for the entire fiscal year of 2025. The company anticipates total sales nearing $12.1 billion and same-restaurant sales growth of around 1.5%. Plans include the opening of 50 to 55 new restaurants with a capital investment around $650 million. The effective tax rate is expected to be approximately 12.5%.

The updated outlook does exclude about $47 million in pre-tax expected costs associated with the Chuy's integration but will encompass Chuy's operating results once fully integrated.

The adjusted diluted net earnings per share from continuing operations is predicted to fall between $9.45 and $9.52, effectively maintaining a positive trajectory despite market challenges. The full details will be shared in an investor conference call scheduled for today.

Conclusion

Darden Restaurants remains a significant player in the restaurant industry, showcasing resilience amid challenges. With a strong performance in Q3 of Fiscal 2025 and an optimistic outlook, Darden is poised for continued growth. For more information about Darden’s extensive brand portfolio including Olive Garden, LongHorn Steakhouse, and the newly acquired Chuy's, visit www.darden.com.