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Key Takeaways
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Darden Restaurants shares jumped Thursday as its second-quarter sales came in better than expected, powered by LongHorn Steakhouse results.
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The company's adjusted profit also beat estimates.
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The chain lifted its full-year revenue outlook following the strong quarter.
Shares of Darden Restaurants (DRI) surged 14% Thursday to lead S&P 500 gainers as the company's fiscal 2025 second-quarter sales and adjusted profit beat expectations on strong LongHorn Steakhouse results.
Darden—which operates LongHorn, Olive Garden, Ruth's Chris, and other restaurant chains—recorded net income of $215.1 million, or $1.82 per share, on revenue of $2.89 billion. According to estimates compiled by Visible Alpha, analysts expected profit of $239.5 million, or $2.02 per share, on revenue of $2.86 billion.
Darden reported adjusted earnings per share (EPS) of $2.03, two cents above expectation.
LongHorn Growth Driving Sales
Same-restaurant sales surged 7.5% year-over-year at LongHorn, well above the 4.3% growth analysts expected. Olive Garden same-restaurant sales also rose more than expected at 2%, but its fine dining operations declined 5.8%, nearly double the 3% drop analysts anticipated.
LongHorn's performance has been strong throughout the year. Executives have said that consumers have been willing to spend on things like a steakhouse meal when they feel they are getting their money's worth.
Darden updated its fiscal 2025 outlook, lifting its revenue projection to about $12.1 billion from the prior range of $11.8 billion to $11.9 billion. The company is expecting same-restaurant sales growth of 1.5% on the year, narrowed from 1% to 2%, while keeping its earnings per share (EPS) from continuing operations outlook at $9.40 to $9.60.
With today's gains, Darden shares moved into positive territory for the year.
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