Darden Restaurants Sees Weak Q3, Cuts FY Outlook

(RTTNews.com) - Darden Restaurants Inc. ( DRI ) Friday detailed a weak financial outlook for the third quarter, hurt mainly by the severe winter, increased payroll taxes and gasoline prices. Based on the weak third-quarter estimates, the restaurant chain lowered its full-year 2013 guidance.

The company estimates US combined same-restaurant sales for Olive Garden, Red Lobster and LongHorn Steakhouse to be a negative 4.5 percent, adversely impacted by the severe winter weather this year than last year.

"Our priority is reestablishing same-restaurant traffic momentum at our three largest brands," said Chief Executive Clarence Otis.

Otis blamed the increased payroll taxes and rising gasoline prices as the two main culprits that has put pressure on the purchasing power of its diners.

Orlando, Florida-based Darden expects third-quarter earnings from continuing operations of $1.00 to $1.02 per share. Analysts polled by Thomson Reuters currently expect earnings of $1.14 for the quarter. Analysts' estimates typically exclude one-time items.

Based on the third quarter results, the company also lowered its full year 2013 outlook. For the full year 2013, Darden now expect earnings from continuing operations in the range of $3.06 to $3.22 per share on sales growth of 6 to 7 percent. Analysts currently estimate earnings of $3.37 per share for the year.

Previously, the company anticipated earnings of $3.29 to $3.49 per share and sales growth of 7.5 to 8.5 percent for the full year 2013.

DRI is currently trading at $45.95, up $1.20 or 2.69%, on the NYSE.

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