Darden Restaurants Inc. (DRI) announced on Thursday that it is sustaining its fiscal 2025 projections despite reporting increased first-quarter earnings that fell short of Wall Street expectations. Additionally, Darden unveiled an exclusive multi-year delivery collaboration with Uber Technologies, Inc. (UBER), aimed at launching on-demand delivery services beginning with Olive Garden in late 2024.
In pre-market trading on the NYSE, Darden shares surged approximately 10% to $175, while Uber shares climbed about 2.2% to $75.10.
### Uber Partnership
According to the agreement, Uber will facilitate on-demand delivery for Darden’s restaurant guests via Darden’s own channels, with delivery operations managed by Uber Direct, Uber's nationwide delivery network.
A pilot program initiating first-party delivery from select Olive Garden locations will commence in late 2024. Following this initial phase, a nationwide rollout across Olive Garden restaurants is anticipated to be completed by May 2025.
Uber Direct, which offers merchants access to Uber's delivery technology and logistics infrastructure, will support couriers in delivering Olive Garden meals directly to customers' doors.
### Fiscal Outlook
For fiscal 2025, Darden reaffirms its projected net earnings per share from continuing operations to range between $9.40 and $9.60. On average, analysts predict earnings of $9.50 per share, as per Thomson Reuters data, which typically excludes special items.
Darden CFO Raj Vennam noted, "The significant decline in traffic during July resulted in our first-quarter earnings falling below expectations. However, post-July, our sales trend has shown improvement. Taking into account this recovery and the planned initiatives for the remainder of the fiscal year, we are reiterating our guidance for fiscal 2025."
### Dividend Announcement
Darden's Board of Directors has declared a quarterly cash dividend of $1.40 per share of common stock, payable on November 1 to shareholders of record at the close of business on October 10.
### Q1 Financial Results
In the first quarter, Darden's net income increased compared to the same period last year but did not meet analysts' expectations.
The company reported a net income of $207.2 million, or $1.74 per share, up from $194.5 million, or $1.59 per share, in the previous year's first quarter.
Adjusted earnings stood at $208.8 million, or $1.75 per share, compared to $217.0 million, or $1.78 per share, during the same period last year. Analysts had forecasted earnings of $1.83 per share.
Quarterly sales rose by 1% to $2.757 billion, up from $2.730 billion last year, driven by sales from 42 net new restaurants. This increase was partially offset by a 1.1% decline in same-restaurant sales.
