Darden Misses Q1 Earnings Estimates, Partners With Uber For Delivery Expansion

Darden Restaurants, Inc. DRI shares are trading higher. The company reported first-quarter financial results today.

The company reported adjusted earnings per share of $1.75, missing the analyst consensus estimate of $1.83. Quarterly sales of $2.76 billion missed the street view of $2.80 billion.

“While we fell short of our expectations for the first quarter, I firmly believe in the strength of our business,” said Darden President & CEO Rick Cardenas.

Darden’s directors have approved a quarterly cash dividend of $1.40 per share on the company’s outstanding common stock. This dividend will be paid on November 1 to shareholders, as recorded as of the close of business on October 10.

In the quarter, the company repurchased around 1.2 million shares of its common stock for a total of $172 million. By the end of the fiscal first quarter, there was $743 million left under the existing $1 billion repurchase authorization.

Also Read: Darden Restaurants Posts Q1 Results, Joins Tesla, Nvidia, XPeng And Other Big Stocks Moving Higher On Thursday

The company has formed an exclusive multi-year delivery partnership with Uber Technologies, Inc. UBER, starting with Olive Garden in late 2024.

This agreement will allow restaurant guests to place on-demand delivery orders through Darden’s channels, with deliveries managed by Uber Direct via Uber’s national delivery network.

A pilot program for first-party delivery from select Olive Garden locations will launch in late 2024.

If the pilot is successful, national expansion at Olive Garden is anticipated to be finalized by May 2025.

Outlook: The company reiterated all aspects of its full year financial outlook for fiscal 2025, culminating in diluted net earnings per share from continuing operations of $9.40 to $9.60 versus $9.50 estimate, which does not include any impact from Chuy’s operations, transaction, financing and integration related costs associated with the pending acquisition.

“The significant step down in traffic during July, led to our first quarter earnings being lower than expected,” said Darden CFO Raj Vennam. “Following the softness in July, our sales trend has continued to improve.  Considering this recovery as well as the planned initiatives to support the remainder of the fiscal year, we are reiterating our guidance for fiscal 2025.”

Price Action: DRI shares are trading higher by 7.39% to $170.90 at last check Thursday.

Photo via Wikimedia Commons

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