Darden Shares Reach Record Highs as Olive Garden Boosts Fourth Quarter Earnings
ORLANDO, FL - Could the idea that millennials hate eating at chain restaurants be a myth after all? If you take a look at restaurant company Darden Restaurant’s newly released fourth quarter earnings report, it may make you reconsider the notion. Darden’s shares had rocketed up nearly 6% on the news its Olive Garden and LongHorn Steakhouse chains had risen their same-restaurant sales by 4.4% and 3.5%, respectively.
"Our strong fourth quarter results wrapped up a solid year of performance," said CEO Gene Lee upon the announcement of the strong quarter. "We continue to improve execution in our restaurants by relentlessly focusing on food, service, and atmosphere. Our strategy is helping to build guest loyalty, drive improved financial results, and grow shareholder value."
According to Business Insider, Lee believes this boost is largely due to the restaurant’s ability to cater to millennial tastes, offering menu items that the demographic is interested in at a correct price point that fits their budget. And the method seems to be paying off: six out of seven of Darden's restaurant brands grew same-stores sales in the fourth quarter, including Olive Garden, LongHorn Steakhouse, and Eddie V’s.
"Millennials still want to come to restaurants," Lee said in a call with investors on Tuesday, according to the source. "I know you all don't think millennials go to casual dining restaurants, but 30% of all our guests are millennials."
As of 11:30 a.m. EST on June 27, the company's shares had reached an all-time high of $95.22, sending the company to a market cap of 11 billion. Today, Darden's stock has evened slightly, hitting just over $91.
Other highlights from Darden’s fourth quarter include:
- Total sales from continuing operations increased 8.1% to $1.93 billion
- Reported diluted net earnings per share from continuing operations decreased 10.0% to $0.99 and were negatively impacted by $0.19 due to:
- A non-cash accounting charge of approximately $0.10 related to the early settlement of a portion of our pension plan commitments
- Approximately $0.09 of transaction and integration expenses related to the April 24, 2017 acquisition of Cheddar's Scratch Kitchen
- Adjusted diluted net earnings per share from continuing operations increased 7.3% to $1.18*
- The company repurchased approximately $15 million of its outstanding common stock
- Same-restaurant sales increased 3.3% for the quarter, excluding Cheddar's Scratch Kitchen
Will the force of Darden’s ability to get millennials on board keep the chain restaurant industry afloat as many doubt its staying power? AndNowUKnow will continue to report.