Darden Restaurants (NYSE:DRI) on Thursday reported quarterly earnings and revenue that missed analysts’ expectations as the omicron variant of COVID-19 led to disappointing sales for Olive Garden.
The company also lowered its earnings outlook for fiscal 2022.
Outgoing CEO Gene Lee said the company saw record sales in December, before omicron disrupted customer traffic, staffing levels and its operating expenses the following month. However, the company adds, Darden’s restaurants began recovering from the downturn by February.
Olive Garden, which accounts for roughly half of Darden’s revenue, reported same-store sales growth of 29.9%, missing StreetAccount estimates of 36.7%.
The restaurant company reported fiscal third-quarter net income of $247 million, or $1.93 per share, up from $128.7 million, or 98 cents per share, a year earlier. Analysts surveyed by Refinitiv were expecting earnings per share of $2.10.
Net sales rose 41.3% to $2.45 billion, falling short of expectations of $2.51 billion. Across all of Darden’s restaurant chains, same-store sales climbed 38.1%. Wall Street was expecting total same-store sales growth of 43.5%, according to StreetAccount estimates. A year ago, Darden’s same-store sales shrank by 26.7%.
After raising its earnings forecast last quarter, Darden lowered it on Thursday. The company is now expecting fiscal 2022 earnings per share from continuing operations of $7.30 to $7.45, down from its prior outlook of $7.35 to $7.60.
DRI shares opened Thursday up 91 cents to $131.85.
