This morning Darden Restaurants (DRI), owner of The Olive Tree and Red Lobster, lowered their full year forecast (Press Release).
They lowered same store sales expectations for fiscal year 2009 from 2% growth to 0%-1% growth, revenue growth from 14%-15% to 12%-13% and EPS growth, exluding items, from 9%-10% to 0%-5%.
The stock is down 13% on heavy volume.
Just another concrete piece of evidence that consumer spending is under pressure.
The stock is cheap here at about 10 times earnings ($28 a share/$2.74 EPS FY 2008) but I wouldn’t touch it.
Disclosure: Top Gun has no position in shares of Darden Restaurants (DRI).