Darden Hits Multiyear High on Earnings, Outlook

Shares of Darden Restaurants Inc. (NYSE: DRI) jumped more than 5% after the opening bell on this morning's sold quarterly results even as its Red Lobster chain continues to struggle.

The Orlando-based full-service restaurant operator reported second-quarter earnings per share (EPS) of $0.85 on revenue of $2.03 billion. In the same period a year ago, the company reported EPS of $0.78 and revenue of $1.94 billion. Results compare to the Thomson Reuters consensus estimates for EPS of $0.84 and $2.03 billion in revenue.

U.S. same-restaurant sales declined 2.6% at Red Lobster, but increased 0.3% at Olive Garden and 3.6% at LongHorn Steakhouse, as well as increasing 2.2% for the Company's Specialty Restaurant Group.

The company's president and CEO pointed out:

Red Lobster's sales held up well given the exceptional same-restaurant sales results in last year's first quarter and its margins expanded, Olive Garden had meaningful sales and margin improvement and LongHorn Steakhouse and the Specialty Restaurant Group continued to have good sales momentum. We also benefitted from our diverse food basket, with a decline in seafood costs on a year over year basis moderating the significant spike in the cost of beef.

The report also said the company:

continues to expect total sales growth in fiscal 2013 to be between 9% and 10% and to anticipate that diluted net earnings per share growth from continuing operations for the year will be between 5% and 9%.

And Darden still plans to open up to 110 net new restaurants in fiscal 2013.

Shares remain about 5% higher in mid-morning trading, at $57.45 in a previous 52-week range of $40.69 to $55.84. This new 52-week high has overrun the analysts' mean price target.

Filed under: 24/7 Wall St. Wire, Earnings Tagged: DRI