Olive Garden and fine dining sales underperform, leading to disappointing earnings for Darden Restaurants.

• In the first quarter, Darden Restaurants' earnings and revenue did not meet Wall Street's expectations.
• The company did not meet its own targets for the quarter, as stated by CEO Rick Cardenas.
• The Olive Garden parent bought Tex-Mex chain Chuy's in July.

Olive Garden and its fine dining restaurants reported weaker-than-expected quarterly earnings and revenue on Thursday, as sales weakened.

"Despite not meeting our expectations for the first quarter, I am confident in the strength of our business and the actions our brand teams are taking to address guests' needs, which will not compromise our long-term health for short-term benefits, said CEO Rick Cardenas in a statement."

Despite the results, shares of the company increased by approximately 10% during premarket trading.

According to a survey of analysts by LSEG, the company's quarterly report for the period ending Aug. 25 deviated from Wall Street's expectations.

• Earnings per share: $1.75 adjusted vs. $1.83 expected
• Revenue: $2.76 billion vs. $2.8 billion expected

Darden's net income for the first quarter of the fiscal year was $207.2 million, or $1.74 per share, an increase from $194.5 million, or $1.59 per share, in the previous year.

The restaurant company earned $1.75 per share, excluding the costs of purchasing Chuy's.

Although net sales increased by 1% to $2.76 billion, the company's same-store sales decreased by 1.1% in the quarter. The company's restaurant traffic fell sharply in July but then improved, according to CFO Raj Vennam. Other restaurant companies have also reported struggling traffic this summer, attributing it to increased summer travel or diners becoming more cautious.

In an attempt to attract customers back, Olive Garden is bringing back its Never Ending Pasta Bowl later this month, despite a 2.9% decrease in same-store sales in the previous quarter.

The fine-dining segment of Darden, which comprises Eddie V's and The Capital Grille, experienced a 6% decline in same-store sales.

Despite being the only division to report same-store sales growth, LongHorn Steakhouse experienced a 3.7% increase in sales.

Although the quarter was dismal, Darden maintained its full-year earnings forecast. For fiscal 2025, Darden anticipates earnings per share from continuing operations ranging from $9.40 to $9.60 and net sales of $11.8 billion to $11.9 billion.