Olive Garden owners' shares jump after strong earnings report
Darden Restaurants shares surged 10% on Thursday after the restaurant group posted better-than-expected fourth-quarter earnings.
Profits hit $172.5mn in the quarter ending May 27, compared to $123.8mn during the same period last year.
The owner of restaurant brands such as Olive Garden and Red Lobster said that the strong results were thanks to its ‘back-to-basics operating philosophy’ and increased sales.
“Our solid fourth quarter results concluded another strong year of performance as we executed our back-to-basics operating philosophy and strengthened our competitive advantages," said CEO Gene Lee.
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"Our strategy remains unchanged, and our operators' consistent focus on being brilliant with the basics has allowed us to continue building guest loyalty while taking market share,” he added.
The restaurant group also raised its dividend 19% to $0.75 per common share.
"Our strong operating model generates substantial cash flows, which enables us to invest in our businesses and continue our history of returning significant cash to our shareholders," Chief Financial Officer Rick Cardenas said in a statement.
"In fiscal 2018 we returned $550 million to shareholders in the form of dividends and share repurchases, and more than $1.5 billion over the past three years."
Following the results, Darden says it is planning to open 45 to 50 new restaurant locations across its eight branded restaurants
The firm also expects same-store sales at all its branded restaurants to grow by up to 2% in 2019.