Shares of Darden Restaurants, (DRI -0.35%) were up as much as 3% in early morning trading today after it reported third-quarter earnings.
The Olive Garden parent posted a profit of $0.82 a share, down from $1.02 a year ago, but in line with its earnings pre-announcement and analyst estimates. Management said its per-share profit would have been $0.95 had it not been for severe winter weather, and costs related to its strategic plan announced in December, which includes separating Red Lobster.
Sales dipped 1.1% to $2.23 billion on a 5.6% same-store sales decline at its core restaurants, missing the analyst consensus at $2.25 billion. Comparable sales were particularly weak at Olive Garden and Red Lobster, falling 5.4% and 8.8%, respectively, though February comps were the company's strongest as weather seemed to improve.
Looking ahead, Darden reaffirmed its earlier guidance for fiscal 2014, which ends in May, saying it expects EPS to decline 15%-20%. Analysts had actually projected a 26% decrease, which may explain why the stock's gaining today. The company also sees same-store sales declining at Olive Garden and Red Lobster, but expects modest growth at Longhorn Steakhouse. That EPS forecast does not include costs incurred relating to the planned separation of Red Lobster.