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Darden Restaurants shares rise on 3Q earnings

Associated Press
Published | Updated
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FILE - This June 27, 2016, file photo shows an Olive Garden restaurant in Methuen, Mass. Darden Restaurants Inc. reports earnings Thursday, March 21, 2019. (AP Photo/Elise Amendola, File)

ORLANDO, Fla. – Shares in Darden Restaurants jumped on Thursday after the company raised its outlook and posted earnings and revenue that beat Wall Street estimates.

The owner of Olive Garden and other chain restaurants reported fiscal third-quarter profit of $223.6 million, beating expectations and the $217.8 million in profits for the same quarter last year.

Another strong showing from its anchor brands has Darden raising its full-year earnings expectations to $5.76 to $5.80 per share, from the previous guidance of between $5.60 and $5.70 per share.

Same-restaurant sales for Olive Garden and LongHorn Steakhouse, which make up nearly 80 percent of Darden's restaurants, increased 4.3 percent and 3.8 percent, respectively, during the quarter. The metric is a key indicator of a restaurant's health as it strips out the impact of locations that have opened or closed in the past year.

On a per-share basis, the Orlando, Florida-based company said it had net income of $1.79. Earnings, adjusted to exclude discontinued operations, came to $1.80 per share.

The results beat Wall Street expectations. The average estimate of 11 analysts surveyed by Zacks Investment Research was for earnings of $1.75 per share. Darden's earnings per share for last year's third quarter were $1.73.

The company posted revenue of $2.25 billion in the period, topping last year's quarter of $2.13 billion as well as Street forecasts. Nine analysts surveyed by Zacks expected $2.24 billion.

Darden shares rose more 6 percent in afternoon trading to $115.59. They've increased more than 15 percent since the beginning of the year and about 23 percent in the past 12 months.

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Elements of this story were generated by Automated Insights using data from Zacks Investment Research. Access a Zacks stock report on DRI at https://www.zacks.com/ap/DRI