Olive Garden parent Darden’s stock falls after same-store sales miss, amid weakness in flagship restaurant chains

Shares of Darden Restaurants Inc.
DRI,
-1.11%
dove 2.5% in premarket trading Thursday, after the restaurant chain operator matched fiscal first-quarter profit expectations but missed on same-store sales, amid weakness in its flagship Olive Garden and LongHorn Steakhouse chains. Net income for the quarter to Aug. 28 fell to $193.0 million, or $1.56 a share, from $230.9 million, or $1.75 a share, in the year-ago period, to match the FactSet consensus for earnings per share. Total sales grew 6.1% to $2.45 billion, just shy of the FactSet consensus of $2.47 billion. Overall same-store sales rose 4.2% to miss the FactSet consensus of 5.1% growth. Same-store sales rose 2.3% at Olive Garden, missing the FactSet consensus of a 2.3% rise; rose 4.2% at LongHorn Steakhouse versus expectations of 5.1% growth; and increased 7.6% at Fine Dining, beating expectations of up 5.9%. Operating costs and expenses increased more than total sales, rising 8.7%, with food and beverage costs growing 16.0% an restaurant labor costs rising 7.9%. For fiscal 2023, the company expects total sales of $10.2 billion to $10.4 billion and same-store sales growth of 4% to 6%, with both surrounding the FactSet consensus for total sales of $10.3 billion and same-store sales of 4.7% growth. The stock has rallied 14.0% over the past three months through Wednesday, while the S&P 500
SPX,
-1.71%
has edged up 0.8%.