Darden Restaurants, Inc. DRI reported dismal first-quarter fiscal 2025 results, with earnings and revenues missing the Zacks Consensus Estimate. On a year-over-year basis, the top line increased, but the bottom line declined.

The quarterly earnings fell short of expectations due to a significant drop in traffic during July. However, since then, the company has seen an improvement in sales trends. Considering this recovery and the planned initiatives for the rest of the fiscal year, the company reaffirmed its guidance for fiscal 2025. The stock inched up 9.4% in the pre-market trading session.

Earnings & Revenues

During the fiscal first quarter, Darden reported adjusted earnings per share (EPS) of $1.75, missing the Zacks Consensus Estimate of $1.81. In the prior-year quarter, DRI reported an adjusted EPS of $1.78.

Darden Restaurants, Inc. Price, Consensus and EPS Surprise

 

Darden Restaurants, Inc. price-consensus-eps-surprise-chart | Darden Restaurants, Inc. Quote

 

Total sales during the quarter came in at $2.76 billion, missing the consensus mark of $2.80 billion. Sales inched up 1% from the prior-year quarter’s level. The upside was backed by contributions from 42 net new restaurants, partially offset by a blended same-restaurant sales decline of 1.1%.

Sales by Segments

Darden reports business under four segments — Olive Garden, LongHorn Steakhouse, Fine Dining, including The Capital Grille and Eddie V's and Other Business.

During the fiscal first quarter, sales at Olive Garden dropped 1.5% year over year to $1.21 billion. Our estimate for the metric was $1.26 billion. Comps in the segment fell 2.9% year over year compared with a 1.5% fall reported in the previous quarter.

At LongHorn Steakhouse, sales were up 9.2% year over year to $731.5 million. Our estimate for the metric was $694.3 million. Comps in the segment rose 3.7% year over year compared with 4.0% growth reported in the previous quarter.

Sales in Fine Dining increased 2% year over year to $278.9 million. Our estimate for the metric was $290.1 million. Comps in the segment fell 6.0% year over year compared with a 2.6% drop reported in the previous quarter.

Sales in Other Business declined 0.7% year over year to $555.5 million. Our estimate for the metric was $571.3 million. Comps in the Other Business dropped 1.8% year over year compared with a 1.1% fall reported in the previous quarter.

Operating Highlights

In the fiscal first quarter, total operating costs and expenses inched up 0.4% year over year to $2.49 billion. The upside was primarily due to increased restaurant expenses, labor costs and marketing expenses. The figure compares to our projection of $2.52 billion.