Shares of Darden Restaurants Inc. (NYSE: DRI), owner and operator of restaurants, are gaining in trading today after the company reported strong first-quarter results. DRI also declared a quarterly cash dividend of $0.50 per share.
DRI reported net earnings from continuing operations of $0.85 per share for the quarter ended August 26, 2012, compared to $0.78 per share reported for the same period in the previous year. Sales for the quarter stood at $2.03 billion, compared to $1.94 billion reported for the same period in the previous year.
The year-over-year increase in sales reflect same-restaurant sales growth of 2.2% for the company’s Specialty Restaurant Group, the acquisition of 11 Eddie V’s Restaurants on November 14, 2011, and the addition and operation of another 92 net new restaurants compared to the first quarter of last year. This was offset by a combined restaurant sales decline of 0.3% for Olive Garden, Red Lobster and LongHorn Steakhouse.
U.S. same-restaurant sales for the quarter rose 3.6% at LongHorn Steakhouse and 0.3% at Olive Garden. U.S. same-restaurant sales at Red Lobster fell 2.6% in the first quarter.
Clarence Otis, Chairman and CEO of Darden Restaurants, said that he is pleased with DRI’s very solid start to the fiscal year. Otis said that Red Lobster’s sales held up well given the exceptional same-restaurant sales results in last year’s first quarter and its margins expanded. Otis added that Olive Garden had meaningful sales and margin improvement and LongHorn Steakhouse and the Specialty Restaurant Group continued to have good sales momentum.
Darden Restaurants also affirmed its financial outlook for fiscal 2013. DRI continues to expect combined U.S. same-restaurant sales growth in fiscal 2013 for Red Lobster, Olive Garden and LongHorn Steakhouse to be between 1% and 2%. The company expects to open approximately 100 to 110 net new restaurants in fiscal 2013, excluding Yard House.
DRI shares hit a 52-week high of $57.93 in trading today. At last check, the stock was trading 4.31% higher at $57.08 on above average volume of 2.53 million.
Year-to-date, DRI shares have gained more than 25%, outperforming the S&P 500.
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