Darden Restaurants, Inc. (DRI: Quote) reported Friday a profit for the fourth quarter that increased from last year, in spite of sluggish sales at Olive Garden and Red Lobster.
Earnings per share met analysts' expectations, while quarterly revenues missed their estimates by a whisker. The company also provided earnings and revenue growth guidance for the full-year 2013 and, raised its quarterly cash dividend by 16 percent.
"Earnings growth for the fourth quarter represents a solid finish to a challenging fiscal year. The double-digit percentage growth in diluted net earnings per share we achieved for the quarter and for the second half of the fiscal year are testaments to the strength of our business model," Chairman and CEO Clarence Otis said in a statement.
The company noted that sales growth in the quarter was lower-than-expected, primarily reflecting same-restaurant sales declines at both Olive Garden and Red Lobster restaurants.
Olive Garden sales grew 2.7 percent to $904 million, while U.S. same-restaurant sales were down 1.8 percent. Red Lobster's sales totaled $681 million, down 2.8 percent, with U.S. same-restaurant sales also declining 3.9 percent.
Longhorn Steakhouse's sales of increased 11.7 percent to $297 million, with U.S. same-restaurant sales also growing 3.0 percent. The Specialty Restaurant Group's sales rose 26.9 percent to $179 million, with same-restaurant sales growing 2.7 percent.
The company also declared a 16 percent higher quarterly cash dividend of $0.50 per share on its outstanding common stock, payable on August 1 to shareholders of record at the close of business on July 10, 2012.
The Orlando, Florida-based full service restaurants operator reported net earnings of $151.2 million or $1.15 per share for the fourth quarter, higher than $137.4 million or $0.99 per share in the prior-year quarter.
Net earnings from continuing operations for the quarter grew 15 percent to $1.15 per share from last year's $1.00 per share.
On average, 28 analysts polled by Thomson Reuters expected the company to report earnings of $1.15 per share for the fourth quarter. Analysts' estimates typically exclude special items.
Total sales from continuing operations for the quarter grew 3.8 percent to $2.07 billion from $1.99 billion in the same quarter last year, but missed twenty-four Wall Street analysts' consensus estimate of $2.11 billion.
The company also declared a 16 percent higher quarterly cash dividend of $0.50 per share on its outstanding common stock, payable on August 1 to shareholders of record at the close of business on July 10, 2012.
For fiscal 2012, Darden reported net earnings from continuing operations or $476.5 million or $3.58 per share, compared to $478.7 million or $3.41 per share last year. Total sales from continuing operations grew 6.6 percent to $8.00 billion from $7.50 billion a year ago. Street was looking for full-year 2012 earnings of $3,58 per share on revenues of $8.04 billion.
Looking ahead to fiscal 2013, Darden expects net earnings per share to grow in a range of 8 to 12 percent over fiscal 2012, on projected sales growth of 6 to 7 percent, translating to sales growth of $480 million to $560 million. Analysts currently look for earnings of $4.06 per share on revenues of $8.59 billion.
DRI closed Friday's regular trading session at $50.39, down $1.11 on a volume of 2.92 million shares, higher than the three-month average volume of 2.27 million shares. In the past 52-week period, the stock has been trading in a range of $40.69 to $55.84.
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by RTT Staff Writer
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