Did Darden Restaurants Shoot Itself in the Foot?

Shares of Darden Restaurants, Inc. (NYSE:DRI) traded as much as 9.5 percent lower on Tuesday morning after the company announced revised second-quarter earnings expectations.

What is Darden Expecting for the Second Quarter?

Darden, which operates Red Lobster, Olive Garden, and LongHorn Steakhouse, among other brands, is expecting diluted net earnings per share of up to $0.26, well below the nearly $0.46 per share that many investors were previously expecting.

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On top of this, the company is expecting same-restaurant sales for its three big brands to drop 2.7 percent, with just 0.7 percent same-restaurant sales growth in its specialty brands.

Darden did announce that it is expecting fiscal-year 2013 sales growth of up to 8.5 percent with diluted net EPS up to $3.49, which includes the cost of purchasing Yard House USA, Inc.

“Our second quarter is an especially value sensitive time of year, and this year’s promotional offers were largely consistent in nature with what we’ve promoted successfully in the past,” said Clarence Otis, Darden’s chairman and chief executive officer, in a statement. “These promotions did not resonate with financially stretched consumers as well as newer promotions from competitors…”