Shares in Orlando, Florida-based Darden fell almost 9 percent in premarket trading.
The company now expects earnings from continuing operations of 25 cents to 26 cents per share for the second quarter ended November 25. Costs associated with its purchase of Yard House USA Inc would cut earnings by 5 cents per share, while Hurricane Sandy would reduce EPS by about 1 cent.
Analysts, on average, expected fiscal second-quarter earnings, excluding items, of 47 cents per share, according to Thomson Reuters I/B/E/S.
Darden expects same-restaurant sales to be down 3.2 percent at Olive Garden, off 2.7 percent at Red Lobster and down 0.8 percent at LongHorn Steakhouse during the second quarter.
This is an economic canary in a coal mine. Here’s why…
No one in my immediate AO cooks anymore. They Kroger/Publix on an almost meal to meal basis, and most of that is pre-packaged & processed junk. No one cooks. When they go out, the frequent the places mentioned above. This is the land of Chili’s, Longhorn, bad Mexican, and QSR.
The next ones you will see is the fast food chains saying much that same, followed shortly by Dot Gov saying that they have struck a deal with McD’s & BK to accept EBT funds.
Seriously folks, it hasn’t even gotten bad yet.