Economic Overview - Market indexes are currently in the red, with the Dow down 160 points, S&P 500 down 23 points, and Nasdaq down 120 points, indicating a negative market sentiment [1] - Fed Chair Powell's comments on the economy remain optimistic, but uncertainties regarding tariff policy persist [2] Labor Market Insights - Initial Jobless Claims for last week were reported at 223K, slightly up from the previous week's revised 221K, indicating a healthy labor market [3][4] - Continuing Claims increased to 1.892 million from a revised 1.859 million, remaining within a stable range [5] Regional Economic Indicators - The Philly Fed index for March was reported at 12.5, exceeding analysts' expectations of 10.0, suggesting positive economic momentum [6] Company Performance - Darden Restaurants reported Q3 earnings of $2.80 per share, missing expectations by a penny but showing an increase from $2.62 per share year-over-year [7] - Revenues of $3.16 billion fell short of the Zacks consensus of $3.21 billion, although this is an increase from $2.97 billion a year ago [7] - Despite the earnings miss, Darden's shares rose by 6% in pre-market trading due to growth prospects from the acquisition of the Chuy's franchise [8]

Core Insights - Darden Restaurants reported $3.16 billion in revenue for the quarter ended February 2025, a year-over-year increase of 6.2%, with an EPS of $2.80 compared to $2.62 a year ago [1] - The reported revenue fell short of the Zacks Consensus Estimate of $3.21 billion, resulting in a surprise of -1.54%, while the EPS also missed the consensus estimate of $2.81 by -0.36% [1] Financial Performance - Darden's shares returned -4.4% over the past month, outperforming the Zacks S&P 500 composite's -7.5% change, and currently holds a Zacks Rank 3 (Hold) [3] - Same-restaurant sales for LongHorn Steakhouse increased by 2.6%, below the 10-analyst average estimate of 4.9% [4] - Same-restaurant sales for Olive Garden rose by 0.6%, compared to the estimated 1.7% by 10 analysts [4] - Consolidated same-restaurant sales showed a year-over-year change of 0.7%, below the average estimate of 1.9% [4] Restaurant Metrics - Total company-owned restaurants stood at 2,165, slightly below the average estimate of 2,174 [4] - Olive Garden had 927 company-owned restaurants, compared to the average estimate of 930 [4] - LongHorn Steakhouse reported 586 company-owned restaurants, slightly above the average estimate of 584 [4] Sales Performance - Olive Garden sales reached $1.33 billion, below the $1.36 billion average estimate, representing a year-over-year change of +1.5% [4] - Other Business sales were $674.30 million, compared to the $689.74 million average estimate, reflecting a year-over-year increase of +20.2% [4] - Fine Dining sales amounted to $385.30 million, slightly below the average estimate of $385.92 million, with a year-over-year change of +3.3% [4] - LongHorn Steakhouse sales were $768.10 million, compared to the average estimate of $784.75 million, showing a year-over-year increase of +5.1% [4]

Core Insights - Darden Restaurants reported a revenue increase of 6.2% year over year in Q3 fiscal 2025, reaching $3.16 billion, although it fell short of analysts' expectations of $3.21 billion [1][3] - Adjusted EPS for the quarter was $2.80, reflecting a 6.9% increase year over year, which met analysts' expectations [1][3] Revenue and Performance - The revenue growth was supported by the acquisition of Chuy's Tex-Mex restaurant chain and the opening of 40 new restaurants in the past year [2][6] - Same-restaurant sales growth was recorded at 0.7%, with LongHorn Steakhouse achieving a 2.6% increase, while Olive Garden saw a modest 0.6% growth [6] Business Overview - Darden operates over 2,165 restaurant locations, including brands like Olive Garden and LongHorn Steakhouse, focusing on brand diversity to cater to various customer segments [4] - The company emphasizes operational efficiency and market penetration through targeted restaurant openings and acquisitions [4][5] Strategic Focus - Darden's current strategy includes integrating new acquisitions and optimizing existing operations for cost efficiency, with plans for 50 to 55 new restaurant openings this fiscal year [5][10] - The company has reduced advertising spend compared to pre-pandemic levels, indicating a shift towards operational efficiency [7] Financial Highlights - Total sales for Q3 2025 reached $3.158 billion, with notable sales during events like Valentine's Day [6][7] - Darden executed significant share repurchases amounting to $53 million, reflecting confidence in its financial position [8] Future Outlook - Management anticipates a modest increase in same-restaurant sales of approximately 1.5% and full-year sales of $12.1 billion [9] - Adjusted EPS guidance for the fiscal year is projected between $9.45 to $9.52, considering transaction-related costs [10]

Darden Restaurants (DRI) came out with quarterly earnings of $2.80 per share, missing the Zacks Consensus Estimate of $2.81 per share. This compares to earnings of $2.62 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -0.36%. A quarter ago, it was expected that this owner of Olive Garden and other chain restaurants would post earnings of $2.05 per share when it actually produced earnings of $2.03, delivering a surprise of -0.9 ...

Financial Data and Key Metrics Changes - The company reported same restaurant sales growth of 2.6% for the third quarter, showing sequential improvement from prior quarters [22] - Adjusted diluted net earnings per share from continuing operations increased by 6.9% year-over-year to $2.80 [23] - Adjusted EBITDA for the quarter was $559 million, with total sales for the quarter reaching $3.23 billion [23][28] Business Line Data and Key Metrics Changes - Olive Garden's total sales increased by 1.5%, driven by same restaurant sales growth of 0.6% [25] - Longhorn Steakhouse saw total sales increase by 5.1%, with same restaurant sales growth of 2.6% [26] - The Fine Dining segment experienced a 3.3% increase in total sales, although same restaurant sales were negative at 0.8% [27] - The Other Business segment, primarily driven by the acquisition of Chuy's, saw sales increase by 20.2% [27] Market Data and Key Metrics Changes - The average same restaurant sales for the industry grew by 0.9%, while guest counts decreased by 1.2% [6] - The median same restaurant sales for the industry decreased by 2.3%, indicating a significant disparity between average and median results [6] Company Strategy and Development Direction - The company is focusing on integrating Chuy's and leveraging its existing brands to drive sales growth [18][42] - New smaller restaurant prototypes are being tested to lower construction costs and accelerate new restaurant openings [16][17] - The company plans to open between 60 and 65 new restaurants in fiscal 2026, with a capital expenditure of $375 million to $400 million for new restaurants [28][29] Management's Comments on Operating Environment and Future Outlook - Management noted that same restaurant sales trends improved in January and February, exceeding industry benchmarks by over 100 basis points [21] - The company remains confident in its strategy and business model, which continues to drive success despite external challenges [30] - Management acknowledged that while consumer sentiment is less optimistic, it has not significantly impacted dining out trends [94] Other Important Information - The company has awarded 98 scholarships worth $3,000 each to the children of team members through its Next Core scholarship program [19] - The company is experiencing a general rise in value perception at Olive Garden, attributed to improved operational performance [81] Q&A Session Summary Question: Is the improvement seen more related to the company's own brands or the industry? - Management indicated that Olive Garden and Longhorn continue to perform well, with overall positive trends reflected in guidance for above 3% same restaurant sales growth [34] Question: What degree of flu impact was observed in the quarter? - Management could not quantify the flu's impact but noted that weather had a more significant effect on sales [40] Question: Can you provide insights on the Uber partnership and advertising spend? - Management stated that while Uber is contributing to advertising costs, the company is funding a larger portion and expects modest impacts on overall advertising spend [47][49] Question: Can you elaborate on the EPS guidance for the fourth quarter? - Management explained that inflation is expected to rise to about 3% in Q4, impacting operating margins, which are not expected to grow materially year-over-year [55] Question: What is driving Olive Garden's recent sales momentum? - Management attributed the sales momentum more to menu news rather than delivery, as the delivery rollout occurred late in the quarter [73] Question: How is the company managing inflation and labor costs? - Management noted that commodity prices are being managed effectively, with labor inflation stabilizing in the mid-3% range [77][78] Question: What is the company's exposure to potential tariffs? - Management indicated that about 80% of the cost basket is domestically sourced, with strategies in place to mitigate risks associated with tariffs [87][89]

Core Insights - Darden Restaurants reported weaker-than-expected sales, with Olive Garden and LongHorn Steakhouse underperforming analysts' projections [1] - The company's shares fell nearly 1% in premarket trading following the earnings report [1] Financial Performance - Darden's fiscal third-quarter net income was $323.4 million, or $2.74 per share, an increase from $312.9 million, or $2.60 per share, a year earlier [1] - Excluding acquisition-related costs for Chuy's, Darden earned $2.80 per share [2] - Net sales increased by 6.2% to $3.16 billion, primarily driven by the addition of Chuy's restaurants [2] Analyst Expectations - Adjusted earnings per share were reported at $2.80, slightly above the expected $2.79 [3] - Revenue of $3.16 billion fell short of the expected $3.21 billion [3]

Third Quarter 2025 Financial Highlights, Comparisons Versus Same Fiscal Quarter Last Year | Consolidated Darden* | 0.7% | | --- | --- | | Olive Garden | 0.6% | | LongHorn Steakhouse | 2.6% | | Fine Dining | (0.8)% | | Other Business* | (0.4)% | * Will not include Chuy's until they have been owned and operated by Darden for a 16-month period (Q4 Fiscal 2026) ** See the "Non-GAAP Information" below for more details "We had a solid quarter, and I am proud of how our teams managed their business and controlled ...

Core Insights - Darden Restaurants, Inc. reported a solid financial performance for the third quarter of fiscal 2025, with total sales reaching $3.158 billion, a 6.2% increase compared to the same quarter last year [2][8]. Financial Performance - Total sales increased to $3.158 billion from $2.975 billion year-over-year, driven by a blended same-restaurant sales increase of 0.7% and contributions from the acquisition of 103 Chuy's restaurants and 40 net new restaurants [2][8]. - Reported diluted net earnings per share from continuing operations were $2.74, while adjusted diluted net earnings per share, excluding Chuy's transaction costs, were $2.80, reflecting a 6.9% increase [8][14]. - Year-to-date sales for fiscal 2025 reached $8.805 billion, up from $8.433 billion in the previous year [4]. Segment Performance - Olive Garden generated sales of $1.330 billion, with a segment profit of $306.6 million, while LongHorn Steakhouse reported sales of $768.1 million and a segment profit of $149.3 million [4]. - Fine Dining segment sales were $385.3 million with a profit of $86.1 million, and the Other Business segment, which includes Chuy's, reported sales of $674.3 million and a profit of $104.0 million [4][3]. Shareholder Returns - The Board of Directors declared a quarterly cash dividend of $1.40 per share, payable on May 1, 2025 [5]. - During the quarter, the company repurchased approximately 0.3 million shares for a total of $53 million, with $548 million remaining under the current $1 billion repurchase authorization [6] [8]. Financial Outlook - The company updated its full-year financial outlook for fiscal 2025, including Chuy's operating results but excluding approximately $47 million in expected transaction and integration costs [7][9]. - The anticipated total sales for fiscal 2025 are approximately $12.1 billion, with same-restaurant sales growth projected at around 1.5% [9]. Operational Metrics - The company operated 2,165 restaurants as of February 23, 2025, compared to 2,022 a year earlier, reflecting growth in its restaurant portfolio [16]. - Total capital spending for the year is expected to be approximately $650 million, with new restaurant openings projected between 50 to 55 [9]. Cash Flow and Financial Position - Net cash provided by operating activities for the nine months ended February 23, 2025, was $1.250 billion, compared to $1.196 billion in the prior year [20]. - Total assets increased to $12.561 billion from $11.323 billion year-over-year, with total liabilities also rising to $10.358 billion [19].

Core Insights - Darden Restaurants, Inc. is set to release its third-quarter financial results on March 20, with expected earnings of $2.79 per share, an increase from $2.62 per share in the same quarter last year [1] - The company projects quarterly revenue of $3.22 billion, up from $2.97 billion a year earlier [1] Analyst Ratings - Truist Securities analyst Jake Bartlett maintained a Buy rating and raised the price target from $200 to $212 on March 17, 2025, with a 72% accuracy rate [4] - Raymond James analyst Brian Vaccaro maintained an Outperform rating and increased the price target from $200 to $210 on January 28, 2025, with an 80% accuracy rate [4] - Barclays analyst Jeffrey Bernstein maintained an Overweight rating and boosted the price target from $206 to $230 on January 7, 2025, with a 64% accuracy rate [4] - Oppenheimer analyst Brian Bittner maintained an Outperform rating and increased the price target from $200 to $218 on January 7, 2025, with a 66% accuracy rate [4] - Stifel analyst Chris O'Cull maintained a Buy rating and boosted the price target from $190 to $205 on December 20, 2024, with a 75% accuracy rate [4]

Group 1 - Oppenheimer analyst Brian Bittner reiterated an Outperform rating on Darden Restaurants, Inc. (DRI) with a price forecast of $218 [1] - Darden is set to release its fiscal 2025 third quarter financial results on March 20, with shares showing a year-to-date increase of 0.7% despite concerns over discretionary consumer spending [1][3] - Bittner raised the stock to a "top pick" in January, based on expectations of a positive earnings cycle in fiscal 2026 starting in late May [2] Group 2 - The analyst remains confident in catalysts for growth, including new sales drivers like OG delivery, and believes that Street margin forecasts are overly conservative [3] - Darden's third-quarter faced industry-wide challenges such as calendar shifts, adverse weather, a tough flu season, and consumer weakness [4] - The analyst forecasts same-store sales growth at 1.2%, below the Street's estimate of 1.7%, with specific segment expectations of 1.0% growth for OG and 4.5% for LH [4] Group 3 - Due to updated same-store sales projections, the earnings per share estimate is slightly below consensus at $2.78 compared to the consensus estimate of $2.79 [5] - DRI shares were trading lower by 0.45% at $187.21 as of the latest check [5]