Darden Restaurants (DRI 29.90), operator of the Olive Garden and Red Lobster chains, reported fiscal third quarter earnings well above expectations and issued a full year outlook that tops the current consensus estimate. Darden reported earnings of $0.80 per share in its fiscal third quarter, excluding nonrecurring items. The results were $0.12 better than the First Call consensus of $0.68.Darden said combined same-restaurant sales were down 3.2% in the quarter. Olive Garden performed the best, with a same-restaurant sales decline of 1.4%. Looking ahead, the Orlando, Fla.-based company issued upside guidance for the full year, expecting earnings per share from $2.66 to $2.74, well ahead of the $2.52 consensus. Revenues are expected to range from $7.09 billion to $7.13 billion, shy of the $7.23 billion consensus.
The chain that is behind such brands as Olive Garden and Red Lobster sees 2009 ESP results coming in 15-20 cents higher than analysts have been anticipating. Management expects sales growth of between 9 percent and 9.5 percent for the year, despite forecasting same-store sales to drop to between 1.25 percent and 1.75 percent. The euphoria in today’s rise may also be tied in to options expiration and some traders getting caught leaning the wrong way.
