Darden Restaurants Q3 earnings report: ‘did a pretty good job’

By:
on Mar 24, 2022
  • Darden reports weaker-than-expected Q3 results and gives dovish guidance.
  • Jim Cramer discussed the earnings report on CNBC's "Squawk on the Street".
  • Darden Restaurants Inc shares are still up more than 2.0% on Thursday.

Darden Restaurants Inc (NYSE: DRI) on Thursday blamed omicron as it reported weaker-than-expected results for the fiscal third quarter. Shares are still up more than 2.0% despite a dovish guidance for the full year.

What Darden Restaurants Q3 earnings report tells us

  • Net income printed at $247 million versus the year-ago figure of $128.7 million.
  • Per-share earnings stood at $1.93, an increase from 98 cents last year.
  • Sales jumped 41% to $1.733 billion, as per the earnings per release.
  • FactSet consensus was for $2.10 of EPS on $2.513 billion in sales.
  • Same-restaurant sales were up 38.1%, also below the experts’ forecast.
  • Olive Garden and Longhorn Steakhouse noted a 29.9% and 31.6% growth, respectively.
  • Fine dining business, including the Capital Grille and Eddie V’s jumped 85.8%.

Full-year guidance and Jim Cramer’s remarks

For the full year, Darden forecasts its sales to fall in the range of $9.55 billion to $9.62 billion, on an up to 30% growth in same-restaurant sales, and a per-share earnings of $7.30 to $7.45. In comparison, analysts had called for $9.609 billion in sales, 32.9% growth in same-restaurant sales, and $7.51 in EPS.

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According to CEO Gene Lee, sales hit a record in December but took a significant hit in January due to omicron. By February, a strong recovery was evident. Commenting on the earnings report, CNBC’s Jim Cramer said on “Squawk on the Street”:

Given the circumstances, Darden actually did a pretty good job. I think what people are afraid of is that these were the last good numbers, now that gasoline is going up. But ever since Gene Lee came in, there’s not been a big correlation with gasoline.

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