Darden Profit Tops Estimate

(RTTNews) - Darden Restaurants Inc (DRI) on Tuesday reported a slip to loss in the second quarter, hurt mainly by impairment charges and other expenses, even as revenues climbed about 5 percent on growth at Olive Garden chain and LongHorn Steakhouse chains.

Looking ahead, the restaurant chain operator lifted the lower end of its 2015 adjusted earnings guidance.

Darden, based in Orlando, Florida, reported a second-quarter net loss of $32.8 million or $0.26 per share, compared with a profit of $19.8 million or $0.15 per share last year.

Results for the quarter included $0.39 per share of asset impairments and other costs.

Excluding items, adjusted earnings for the quarter were $0.28 per share, compared with $0.12 per share in the prior year. On average, 25 analysts polled by Thomson Reuters estimated earnings of $0.27 per share for the quarter. Analysts' estimates typically exclude special items.

Darden operates more than 1,500 restaurants, and reported second-quarter revenues of $1.56 billion, an increase from $1.49 billion a year ago.

Twenty analysts had a consensus revenue estimate of $1.55 billion for the quarter.

Comparable same-restaurant sales at its key Olive Garden chain rose 0.5 percent, LongHorn Steakhouse gained 2.6 percent, and Specialty Restaurant Group gained 3.2 percent.

For the full year 2015, Darden now projects net earnings from continuing operations of $1.30 to $1.35 per share and adjusted earnings of $2.25 to $2.30 per share. The company had earlier expected net earnings of $1.74 to $1.84 per share and adjusted earnings of $2.22 to $2.30 per share.

Analysts currently expect earnings of $2.26 per share for the year.

Also Darden declared a quarterly dividend of $0.55 per share.

Last month, Darden said it would cut 60 jobs and eliminate 25 open positions as part of restructuring efforts.

In October, Darden's Clarence Otis stepped down as chief executive, just days after all twelve directors nominated by activist investor and key shareholder, Starboard Value L.P., were elected to the restaurant chain's board. Otis was replaced on an interim basis by Gene Lee, previously president and chief operating officer.

DRI closed Tuesday at $55.91, down $1.29 or 2.26%, on a volume of 2.2 million shares on the NYSE. In after hours, the stock gained $1.09 or 1.95% at 57.00.