Olive Garden parent swings to a loss as sales plunge 43%

Earnings

An Olive Garden restaurant in Times Square in New York.

Richard Levine | Corbis | Getty Images

Darden Restaurants on Thursday reported that same-store sales were nearly cut in half during the fiscal fourth quarter as dining room closures from the coronavirus pandemic weighed on its revenue.

But the Olive Garden parent expects its business to pick up in the next three months. The company’s outlook for next quarter expects total sales to be about 70% of the prior year’s.  

Shares of the company were up 3% in premarket trading.

Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:

  • Loss per share: $1.24, adjusted
  • Revenue: $1.27 billion 

The company reported fiscal fourth-quarter net loss from continuing operations of $479.7 million, or $3.85 per share, compared with earnings of $208.7 million, or $1.67 per share, a year earlier.

Excluding items, Darden earned $1.24 per share.

Net sales dropped 43% to $1.27 billion. Across all of its brands, same-store sales fell 47.7%.

Analysts were expecting the company to lose $1.65 per share on revenue of $1.27 billion, according to Refinitiv estimates. However, the impact from the Covid-19 crisis makes these estimates difficult to compare with actual earnings. 

Darden said that it is generating positive operating cash flow, as of the week ended June 21. It had over $750 million in cash on hand as of June 22 and has access to a $750 million credit facility.

For the fiscal first quarter of 2021, the restaurant company expects net earnings per share from continuing operations to turn positive. It is also forecasting earnings before interest, taxes, depreciation and amortization of at least $75 million.

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