Darden Restaurants (NYSE: DRI) reported mixed first-quarter results on Thursday but stood by its original fiscal 2023 outlook, anticipating that inflation will level out in the next quarter. The multi-brand restaurant operator, which is the parent company of Olive Garden and LongHorn Steakhouse, net sales rose 6.1% throughout the quarter. Shares fell 2.5% during early morning trading upon the news.
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According to CEO Rick Cardenas, inflation has negatively impacted consumers, specifically those that make under USD50,000 per year. Furthermore, inflation has also affected the company’s operating profit as its price for food, beverages and labor rose higher during the quarter, compared to the previous year’s results.
“We’re seeing a little bit of change in behavior from that consumer, but not huge,” he said.
The company reported earnings of USD1.56 per share, meeting the wall street analyst estimates. Revenue amounted to USD2.45 Billion, lower than analysts anticipated USD2.47 Billion.
“I am pleased with the performance of all our brands in what remains a challenging inflationary and uncertain macroeconomic environment,” said Darden President & CEO Rick Cardenas. “We had a solid quarter and we saw more normal seasonality return to our business, which we did not experience last year. Darden’s strategy, together with the breadth of our brand portfolio, our team members’ passion to serve, and the strength of our balance sheet, gives me confidence in our ability to continue to win.”
Net income for the period was USD193 Million, less than the previous year’s USD230.9 Million, or USD1.75 per share.