Darden Restaurants Inc. reported a $32.8 million loss in the company’s fiscal second quarter as several adjustments and one-time items bit into the casual dining operator’s profits.
Company revenue increased 4.9 percent to $1.56 billion in the quarter ending November 23 from $1.49 billion in the same period in 2013, as most of the chain’s brands reported same-store sales growth. That included a 0.5 percent same-store sales growth at its flagship Olive Garden brand, and a 2.6 percent increase at LongHorn Steakhouse. Same-store sales rose 3.2 percent.
“Our brands performed well during the second quarter,” interim chief executive Gene Lee said in a statement. “We have been working diligently to execute our strategy, including getting back to the basics while delivering the best possible guest experience. It is starting to show in both improved revenue and profitability,” he said.
On an adjusted basis, the company said that earnings per diluted share were 28 cents, up 133 compared with the same period a year ago when adjusted EPS was 12 cents.
Yet adjustments and one-time charges hurt earnings per share by 52 cents in the quarter. Those adjustments include asset impairments and lease buyouts, severance and other costs related to expense reductions, such as the company’s closure of its aviation department, various legal fees, debt breakage costs and other impairments.
Still, Darden’s stock rose nearly 2 percent in after-hours trading.
The company is working to improve sales at Olive Garden, as well as improving the chain’s overall profitability. Darden is operating with an almost completely new board after shareholders voted all 12 candidates endorsed by the activist investor Starboard Value in a proxy in September.
The company said that its adjusted earnings per share for its 2015 fiscal year will increase between 32 percent and 35 percent, to $2.25-$2.30 per share. That is an increase from the low end of its earnings guidance, which had been $2.22 per share.
Olive Garden’s same store sales rose in each month of the quarter, the company said.
Contact Jonathan Maze at [email protected].
Follow him on Twitter at @jonathanmaze
