Darden Restaurants (NYSE:DRI) on Thursday reported that its revenue fell by more than 28% in its fiscal first quarter as the company’s business slowly recovers from the coronavirus pandemic.
The Olive Garden parent reported fiscal first-quarter net income of $36.1 million, or 28 cents per share, down from $170.6 million, or $1.37 cents per share, a year earlier. Analysts were expecting earnings of five cents per share.
Excluding losses from discontinued operations, Darden earned $37.3 million in the latest period, compared with $171.8 million a year ago.
Net sales dropped 28.4% to $1.53 billion, missing expectations of $1.56 billion. Same-store sales across all of its restaurant brands plunged 29% during the quarter.
The company’s fine dining business is under the most pressure, with same-store sales shrinking by 39%. Olive Garden, which accounts for roughly half of Darden’s revenue, saw its same-store sales decline by 28%. LongHorn Steakhouse’s same-store sales fell by just 18%.
Darden expects its fiscal second-quarter sales to fall 18% compared with the same time last year. The company is also forecasting diluted net earnings per share from continuing operations in a range of 65 cents to 75 cents.
Darden also said that it fully repaid its $270-million term loan on Aug. 10, citing its “steadily improving cash flows” in the quarter and greater confidence in its cash flow projections. It is also reinstating its dividend and will pay out 30 cents per share for this quarter’s results. The company has $655 million of cash on hand.
DRI shares gained $6.30, or 7%, to $96.30.