Darden Restaurants Edges Earnings Estimates, Down on Guidance

Darden Restaurants (NYSE: DRI) edged earnings estimates during the third quarter. The Orlando, Florida-based firm posted EPS of $1.02, down over 18 percent year-over-year. However, it edged the Wall Street consensus of $1.01 per share. Third quarter revenue climbed 4.6 percent year-over-year and matched analysts' expectations of $2.26 billion. Customers Like the SpecialDarden's specialty restaurant segment grew 61 percent during the third quarter, closing with $287 million in sales. The massive growth was driven primarily by the addition of 43 Yard House restaurants. The company also added five Bahama Breeze, seven Seasons 52 and three The Capital Grille restaurants during the quarter. Same restaurant sales in this segment grew on all counts except one. The Capital Grille, Eddie V's and Seasons 52 posted gains while Bahama Breeze suffered a slight setback of -0.3 percent. Beefed Up SalesLonghorn Steakhouse generated $332 million during the quarter, rising around seven percent from Q3 2012. This chain's growth was due to the addition of 42 new restaurants. Meanwhile, same restaurant sales declined 1.6 percent. Red Lobster Under WaterRed Lobster's third quarter sales of $669 million marked a six percent drop from Q3 fiscal 2012. While the addition of three new restaurants helped limit the downfall, same restaurant sales declined 6.6 percent. Growing the GardenOlive Garden closed the third quarter with sales of $962 million, increasing 0.6 percent year-over-year. As with Longhorn Steakhouse, Darden added 42 new Olive Garden restaurants during the quarter. The additions were responsible for the positive sales figure, as same restaurant sales declined 4.1 percent. Interestingly, in terms of same restaurant sales, February marked the chain's steepest decline by far during the third quarter. Sales dropped around nine percent and same restaurant traffic declined seven percent during the month. According to Darden, winter weather adversely affected results for its restaurant chains in both December and February, with February sales suffering the most from Old Man Winter. Unwrap a 50-Cent DividendDarden's board of directors has declared a quarterly cash dividend of 50 cents on outstanding shares of common stock. Shareholders of record as of the close of business on April 10 will be paid on May 1. textGuidance Not So AppetizingDarden expects revenue to grow six to seven percent in fiscal 2013. If this pans out, it will finish in the $8.48 to $8.56 billion range. This is on par with the $8.51 billion analysts expect.News isn't so great on the EPS front. While analysts want to see earnings of $3.16 per share, Darden anticipates finishing in the $3.06 to $3.22 range. At the middle-ground of $3.14, the company would miss the mark. Investors Don't Like the MenuAfter three consecutive days of gains, Darden is on a downslide on word of its so-so guidance. It has dropped to around $48 in the pre-market, its lowest price since March 13.Darden has declined around two percent on Friday.