Updated Version 2 - Olive Garden's parent company delivers slightly lower-than-expected results as consumers continue to face pressure

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Reuters, September 24 - Darden Restaurants Group (DRI.N) reported quarterly results on Thursday that were slightly below market expectations, as budget-conscious diners reduced their dining spending and prioritized high-value consumption.

The parent company of "Olive Garden" saw its share price drop about 5% in pre-market trading, but the company still reaffirmed its annual targets.

Concerns over inflation, gasoline prices, and the overall economic outlook have made consumers more selective in their discretionary spending this year.

Its main competitor McDonald's MCD.N warned on Wednesday that as long as inflation remains high, overall industry foot traffic in key markets is likely to stay flat.

As more people opt to dine at home—a more economical alternative for many families—casual dining chains have struggled to boost traffic, even with meal deals, limited-time offers, and new menu items.

Darden still expects annual same-store sales to grow by 2.5% to 3.5%, and anticipates annual earnings per share from continuing operations to be between $11.10 and $11.35.

According to data compiled by London Stock Exchange Group (LSEG), the company’s first-quarter sales grew 5.1% to $3.20 billion, slightly below analysts’ expectations of $3.21 billion.

Same-store sales at "Olive Garden", the largest chain by revenue, grew 1.1%, slowing from 5.9% in the same period last year; "LongHorn Steakhouse" saw sales grow to 6.2%, up from 5.5% a year earlier.

Adjusted earnings per share from continuing operations at Darden Restaurants Group grew 4.1% to $2.05 this quarter, but did not meet the analysts' average estimate of $2.06.

(For the convenience of non-English speakers, Reuters has automatically translated its reports into several other languages. As automated translation may contain errors or lack necessary context, Reuters does not guarantee the accuracy of the automated translation and offers it solely for readers’ convenience. Reuters accepts no responsibility for any damage or loss caused by the use of the automated translation feature.)