Darden Restaurants (DRI) stock surged 7.36% in pre-market trading on Thursday after the company reported better-than-expected fiscal third-quarter earnings and raised its full-year outlook. The restaurant chain operator, known for brands like Olive Garden and LongHorn Steakhouse, demonstrated resilience in a challenging consumer environment.
For the quarter ended February 23, Darden posted adjusted earnings per share of $2.80, surpassing analysts' estimates of $2.79. Total sales increased by 6.2% to $3.16 billion, primarily driven by the recent acquisition of Chuy's Tex-Mex chain and the addition of 40 net new restaurants compared to the previous year. However, the revenue figure fell short of the $3.21 billion expected by Wall Street.
Despite facing headwinds from adverse weather conditions and overall consumer weakness, Darden managed to achieve a modest 0.7% increase in same-restaurant sales. The company also updated its fiscal 2025 guidance, now projecting adjusted earnings per share between $9.45 and $9.52, up from the previous range of $9.40 to $9.60. This positive outlook, combined with the earnings beat, appears to have outweighed concerns about the slight revenue miss, leading to the significant stock price jump.
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