Darden Restaurants Inc. (DRI), owner of the Red Lobster and Olive Garden chains, fell the most in almost a year in New York after reporting preliminary fiscal second- quarter profit that trailed analysts’ estimates.
The shares slid 9 percent to $47.72 at 10:18 a.m. after earlier dropping as much as 10 percent for the biggest intraday decline since Dec. 6. The Orlando, Florida-based company’s stock had gained 15 percent this year through yesterday.
Per-share profit in the three months ended Nov. 25 was about 25 cents to 26 cents, the company said today in a preliminary earnings statement. Excluding certain items, earnings were about 31 cents to 32 cents a share. The average of 30 analysts’ estimates compiled by Bloomberg was 46 cents.
Chief Executive Officer Clarence Otis said the company’s promotions didn’t resonate with consumers and were affected by rivals’ offers. The company is reworking its promotions at Red Lobster, Olive Garden and LongHorn Steakhouse for the remainder of the year, he said.
Hurricane Sandy, which caused restaurants to close, hurt earnings in the quarter by about 1 cent a share, the company said in the statement. Acquisition and closing costs for Yard House USA Inc., which Darden bought in August, reduced profit by about 5 cents a share.
Darden said it plans to release final second-quarter results on Dec. 20.
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