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Darden Restaurants, the owner of Olive Garden restaurants and LongHorn Steakhouses, took a big hit related to its pension plan, sending shares lower ahead of the opening bell.
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The restaurant operator reported second-quarter profit fell 77.2 percent from a year ago to $24.7 million, or 20 cents a share, due to a charge related to the termination of its defined-benefit pension plan.
Adjusted earnings from continuing operations were $1.12 a share as revenue rose 4.2 percent to $2.06 billion. Wall Street analysts surveyed by Refinitiv were expecting profits of $1.07 a share on revenue of $2.06 billion.
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“We had a good quarter with continued same-restaurant sales growth outpacing the casual dining industry benchmarks, especially at LongHorn,” CEO Gene Lee said in a statement.
Darden said blended same-store sales rose 2 percent year-over-year, led by 6.7 percent growth at Longhorn Steakhouse. Olive Garden saw its same-store sales climb 1.5 percent from last year.
On the flipside, Cheddar’s Scratch Kitchen (-1.2 percent), Seasons 52 (-3.5 percent) and Bahama Breeze (-3.4 percent) all saw declines.
Looking ahead, Darden reaffirmed all aspects of its 2020 outlook. The restaurant operator predicts earnings of $6.30 to $6.45 a share on total sales growth of 5.3 percent to 6.3 percent.
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Darden Restaurants has climbed 16.5 percent this year, trailing a 27.3 percent gain on the S&P 500.
