The upcoming report from Darden Restaurants (DRI) is expected to reveal quarterly earnings of $2.82 per share, indicating an increase of 7.6% compared to the year-ago period. Analysts forecast revenues of $3.21 billion, representing an increase of 8% year over year.Over the past 30 days, the consensus EPS estimate for the quarter has been adjusted upward by 0.1% to its current level. This demonstrates the covering analysts' collective reassessment of their initial projections during this period.Prior to a c ...

The Retail-Wholesale group has plenty of great stocks, but investors should always be looking for companies that are outperforming their peers. Darden Restaurants (DRI) is a stock that can certainly grab the attention of many investors, but do its recent returns compare favorably to the sector as a whole? A quick glance at the company's year-to-date performance in comparison to the rest of the Retail-Wholesale sector should help us answer this question.Darden Restaurants is one of 214 individual stocks in t ...

ORLANDO, Fla., Feb. 20, 2025 /PRNewswire/ -- Darden Restaurants, Inc., (NYSE: DRI) plans to release its fiscal 2025 third quarter financial results before the market opens on Thursday, March 20, 2025, with a conference call to follow at 8:30 am ET. Rick Cardenas, CEO, and other senior management will discuss third quarter results and conduct a question and answer session. For those who cannot listen to the live broadcast, a replay will be available shortly after the call. What: Darden Restaurants, Inc. F ...

Industry Overview - Consumers are experiencing price pressures due to rising inflation, which has raised concerns about the overall health of the economy. Despite this, spending at food services and drinking places has remained strong, indicating a shift in consumer behavior towards dining out [1][4]. - The U.S. restaurant industry is projected to reach $1.5 trillion by 2025, reflecting growth potential despite current economic challenges [9]. Retail Sales Performance - Overall retail sales fell by 0.9% in January, marking the first decline since August and the sharpest drop in nearly two years. This decline is attributed to extreme winter temperatures and wildfires [5]. - In contrast, restaurant sales totaled $90.8 billion in January, showing a month-over-month increase of 0.9% and a year-over-year increase of 6.9% [4]. Consumer Spending Trends - The consumer price index (CPI) increased by 0.5% in January, following a 0.4% rise in December, indicating ongoing inflationary pressures [6]. - Despite inflation, consumers are spending lavishly at restaurants, suggesting that many households have solid cash reserves [4][6]. Competitive Landscape - Quick-service restaurants focusing on affordability have shown resilience in the current market, as budget-conscious diners seek low-cost meal options [7]. - Competition in the value-driven sector has intensified, with brands enhancing promotions and introducing cost-saving deals to attract and retain customers [8]. Company Highlights - **Brinker International, Inc. (EAT)**: Expected earnings growth rate for the current year is 98.8%, with a Zacks Consensus Estimate improvement of 47.1% over the past 60 days. Currently holds a Zacks Rank 1 [10][11][12]. - **Kura Sushi USA, Inc. (KRUS)**: Expected earnings growth rate is over 100%, with the Zacks Consensus Estimate improving more than 100% in the last 60 days. Also holds a Zacks Rank 1 [13]. - **Darden Restaurants, Inc. (DRI)**: Expected earnings growth rate is 7.2%, with a slight improvement of 0.5% in the Zacks Consensus Estimate over the past 60 days. Currently holds a Zacks Rank 2 [14]. - **Potbelly Corporation (PBPB)**: Expected earnings growth rate is 60%, with a 14.3% improvement in the Zacks Consensus Estimate over the past 60 days. Currently holds a Zacks Rank 2 [15].

Core Viewpoint - Darden Restaurants (DRI) has received an upgrade to a Zacks Rank 2 (Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Impact - The Zacks rating system focuses on changes in earnings estimates, which have a strong correlation with near-term stock price movements, particularly due to institutional investors adjusting their valuations based on these estimates [4][6]. - For Darden Restaurants, the increase in earnings estimates suggests an improvement in the company's underlying business, likely leading to upward pressure on its stock price [5][8]. Earnings Estimate Revisions - Darden Restaurants is projected to earn $9.52 per share for the fiscal year ending May 2025, reflecting a year-over-year increase of 7.2% [8]. - Over the past three months, the Zacks Consensus Estimate for Darden has risen by 0.5%, indicating a positive trend in earnings expectations [8]. Zacks Rank System - The Zacks Rank system classifies stocks based on earnings estimate revisions, with only the top 20% of stocks receiving a 'Strong Buy' or 'Buy' rating, highlighting their potential for market-beating returns [9][10]. - The upgrade of Darden Restaurants to a Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, suggesting a favorable outlook for the stock in the near term [10].

Sales Performance - Sales for the three months ended November 24, 2024, increased by 6.0% to $2,890.0 million compared to $2,727.3 million in the same period last year[124] - Total sales increased 6.0% to $2.89 billion for Q2 FY2025 and 3.5% to $5.65 billion for the first six months of FY2025, driven by 142 net new restaurants and a blended same-restaurant sales increase of 2.4% and 0.7% respectively[151] - Olive Garden's sales increase for the second quarter of fiscal 2025 was driven by a 3.7% increase in average check, partially offset by a 1.6% decrease in same-restaurant guest counts[132] - Olive Garden's sales increased by 3.3% to $1,292.5 million in Q2 FY2025 compared to $1,251.4 million in Q2 FY2024, with same-restaurant sales (SRS) growth of 2.0%[181] - LongHorn Steakhouse's sales grew by 10.4% to $710.1 million in Q2 FY2025, driven by a 7.5% increase in same-restaurant sales, with guest counts up 4.3% and average check up 3.1%[181][182] - Fine Dining segment sales declined by 3.8% to $306.0 million in Q2 FY2025, with same-restaurant sales down 5.8%[181] - Other Business segment sales increased by 12.9% to $581.4 million in Q2 FY2025, with same-restaurant sales up 0.7%[181] Earnings and Profitability - Net earnings for the six months ended November 24, 2024, increased by 3.9% to $422.3 million compared to $406.6 million in the same period last year[124] - Net earnings from continuing operations were $215.7 million for Q2 FY2025 and $423.3 million for the first six months of FY2025, compared to $212.3 million and $407.1 million in the same periods of FY2024[151] - Operating income for the six months ended November 24, 2024, increased by 5.6% to $561.3 million compared to $531.4 million in the same period last year[124] - Olive Garden's segment profit margin increased to 21.4% in November 2024, up 40 basis points from 21.0% in November 2023[189] - LongHorn Steakhouse's segment profit margin rose to 18.9% in November 2024, a 150 basis points increase from 17.4% in November 2023[189] - Fine Dining's segment profit margin decreased to 17.2% in November 2024, down 60 basis points from 17.8% in November 2023[189] - Other Business segment profit margin increased to 13.6% in November 2024, up 70 basis points from 12.9% in November 2023[189] - LongHorn Steakhouse's profit margin increase was driven by positive same-restaurant sales and lower food and beverage costs[191] - Fine Dining's profit margin decrease was due to negative same-restaurant sales and higher restaurant labor costs[191] - Other Business' profit margin increase was primarily due to the addition of Chuy's operating results and lower food and beverage costs[191] Expenses and Costs - Marketing expenses increased by 32.2% to $48.8 million for the three months ended November 24, 2024, primarily due to increased marketing and media spend[124][136] - Food and beverage costs decreased as a percentage of sales by 0.9% due to pricing leverage, cost savings, and inflation impacts[185] - Restaurant labor costs decreased as a percentage of sales by 0.5% due to sales leverage and productivity improvements, partially offset by inflation[185] - Marketing expenses increased as a percentage of sales due to higher marketing and media spend[185] - General and administrative expenses increased as a percentage of sales by 0.7% due to Chuy's transaction and integration costs[185] - Depreciation and amortization expenses increased as a percentage of sales due to the Chuy's acquisition and new restaurant investments[185][186] Debt and Financial Position - The carrying value and fair value of long-term debt as of November 24, 2024, was $2.12 billion and $2.13 billion, respectively[143] - The company had $94.5 million of standby letters of credit related to workers' compensation and general liabilities as of November 24, 2024[145] - The company acquired 100% of Chuy's Holdings, Inc. for $649.1 million in an all-cash transaction, financed by $400.0 million in 4.350% senior notes due 2027 and $350.0 million in 4.550% senior notes due 2029[151] - The company's outstanding long-term debt as of November 24, 2024, includes $500 million of unsecured 3.850% senior notes due in May 2027[202] - The company has a $1.25 billion Revolving Credit Agreement with $974.2 million of credit available as of November 24, 2024[166] Cash Flow and Capital Expenditures - Net cash flows from operating activities increased to $661.8 million for the first six months of FY2025, up from $609.9 million in the same period of FY2024[172] - Capital expenditures increased to $314.5 million for the first six months of FY2025, reflecting higher new restaurant construction and remodel spend[173] - Net cash flows from operating activities increased in fiscal 2025 due to higher net earnings and timing of federal income tax payments[204] - The company believes its internal cash-generating capabilities and potential issuance of equity or unsecured debt securities will be sufficient to finance capital expenditures through fiscal 2025[205] Share Repurchases and Current Assets - The company repurchased 0.9 million shares in Q2 FY2025 and 2.1 million shares in the first six months of FY2025 under a $1 billion share repurchase program[174] - Current assets totaled $879.6 million as of November 24, 2024, up from $822.8 million as of May 26, 2024, primarily due to increases in inventories and prepaid expenses[175] Strategic Initiatives and Partnerships - The company entered into an exclusive multi-year delivery arrangement with Uber Technologies, Inc., with a pilot for first-party delivery at approximately 100 Olive Garden locations[129] - The company expects fiscal 2025 sales to be approximately $12.1 billion, with same-restaurant sales growth of approximately 1.5% and 50 to 55 new restaurant openings[131] - Total restaurant count increased to 2,152 as of November 24, 2024, up from 2,010 in the same period last year[127] Tax and Risk Management - The effective income tax rate for Q2 FY2025 was 12.3%, up from 12.1% in Q2 FY2024, primarily due to nondeductible transaction costs related to Chuy's acquisition[160] - Potential losses from equity forwards, commodity instruments, and interest rate exposures were estimated at $58.6 million over one year as of November 24, 2024[180] Segment Performance - Fine Dining segment saw a same-restaurant sales decrease of 8.3% in Q2 FY2025 due to a 8.3% decrease in guest counts, partially offset by a 2.7% increase in average check[156] - Fine Dining segment sales declined by 3.8% to $306.0 million in Q2 FY2025, with same-restaurant sales down 5.8%[181] - Other Business segment sales increased by 12.9% to $581.4 million in Q2 FY2025, with same-restaurant sales up 0.7%[181]

Market Analysis - The S&P 500 (SP500) was analyzed with a focus on weekly price patterns, charting all 500 stocks individually [3] - The analysis was conducted by Rob Isbitts, founder of Sungarden Investment Publishing, who has been charting investments since the 1980s [3] - Sungarden YARP Portfolio is a community dedicated to navigating the modern investment climate with a non-traditional approach to income investing [3] Investment Strategy - The approach emphasizes humility, discipline, and listening to the stories the markets tell [3] - Subscribers are taught how to interpret market signals effectively [3]

Shares of Darden Restaurants, Inc. (DRI) have surged to a new high, capturing the attention of investors eager to capitalize on its robust performance in the casual dining sector. On Thursday, the stock reached a new 52-week high of $188.94 before closing slightly lower at $188.66.As a stalwart in the industry, Darden's diversified portfolio, operational excellence and strategic initiatives have propelled it to new heights. Over the past three months, DRI has outperformed its peers, including Chipotle Mexic ...

Darden Restaurants (NYSE: DRI ), the crown jewel of full-service restaurants, is shining brighter now. This is a far cry from the mid-year outlook. Back then, only LongHorn SteakhouseI'm an Equity Analyst and Accountant specializing in restaurant stocks, with a strong foundation in Business Administration and Accounting, complemented by an MBA in Forensic Accounting and Controllership. As the founder of Goulart's Restaurant Stocks, I lead a company focused on analyzing restaurant stocks in the U.S. market. ...

I consider an investment ideal if it performs its core business in a sector projected to experience structural (organic) growth in excess of GDP growth over the next 5-10 years; profits from sustainable competitive advantages that translate into attractive unit economics; In the hands of competent, ethical, and long-term thinkers; with a fair valuationAnalyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions ...