ORLANDO, Fla., March 20, 2025 /PRNewswire/ -- Darden Restaurants, Inc. (NYSE:DRI) today reported its financial results for the third quarter ended February 23, 2025. Third Quarter 2025 Financial Highlights, Comparisons Versus Same Fiscal Quarter Last Year Total sales increased 6.2% to $3.2 billion, driven by a blended same-restaurant sales* increase of 0.7% and sales from the acquisition of 103 Chuy's restaurants and 40 net new restaurants Same-restaurant sales: Consolidated Darden* 0.7 % Oli ...

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]

Core Viewpoint - Darden Restaurants, Inc. is set to report its third-quarter fiscal 2025 results on March 20, with expectations of improved earnings and revenue compared to the previous year [1][3]. Earnings Estimates - The Zacks Consensus Estimate for fiscal third-quarter earnings per share (EPS) is $2.81, reflecting a 7.3% increase from $2.62 in the same quarter last year [3]. - Revenue expectations are pegged at $3.21 billion, indicating a 7.9% rise from the prior year's figure [3]. Factors Influencing Performance - Darden's quarterly results are anticipated to benefit from strong same-restaurant sales growth, strategic pricing, and operational efficiencies [4]. - Menu innovation and value offerings are expected to drive customer traffic, alongside enhancements in digital ordering and loyalty programs [4]. Revenue Contributions - Core casual dining brands, particularly Olive Garden and LongHorn Steakhouse, are projected to contribute significantly to revenue, with expected increases of 3.4% to $1.4 billion and 7% to $0.8 billion, respectively [5]. - Fine dining revenue is expected to rise by 5.7% year over year to $0.4 billion [5]. Operational Enhancements - Improvements in supply chain optimization and technology-driven efficiencies are likely to enhance cost controls, contributing to margin expansion [6]. - Initiatives aimed at reducing food waste and optimizing kitchen operations are expected to support bottom-line growth, with adjusted EBITDA projected at $0.55 billion [6]. Cost Challenges - Darden faces macroeconomic challenges, including inflationary pressures and fluctuations in consumer discretionary spending [7]. - Food and beverage costs are predicted to rise by 8.2% to $1 billion, while labor costs are expected to increase by 6.1% to $1 billion [7]. Earnings Prediction Model - The current model does not predict an earnings beat for Darden, as the company has an Earnings ESP of -1.24% and a Zacks Rank of 3 [8].

Core Insights - Darden Restaurants Inc (NYSE:DRI) stock has recently increased by 0.9% to $187.70 after a pullback to its lowest level since January, following a record high of $203.12 on March 3 [1] - The stock has shown a nine-month lead of 22.2% and is approaching a trendline that historically yields bullish returns [1] - The stock is currently trading within one standard deviation of its 80-day moving average, a position that has historically led to gains [2] Performance Analysis - In the past three years, similar trading conditions have occurred six times, resulting in DRI being higher a month later 67% of the time, with an average gain of 4.1% [3] - If the stock follows this trend, it could rise above $195, nearing its all-time peak [3] Options Market Sentiment - The equity's 10-day call/put volume ratio stands at 16.87, which is higher than all annual readings, indicating a potential unwinding of pessimism in the options market [4]

Core Insights - Darden Restaurants (DRI) is expected to report quarterly earnings of $2.82 per share, reflecting a 7.6% increase year-over-year, with revenues projected at $3.21 billion, an 8% increase from the previous year [1] Earnings Estimates and Revisions - The consensus EPS estimate for the quarter has been adjusted upward by 0.1% over the past 30 days, indicating a reassessment by analysts [1][2] Sales Projections - Analysts project 'Sales- Olive Garden' to reach $1.36 billion, a year-over-year increase of 4% [4] - 'Sales- Other Business' is estimated at $689.74 million, showing a significant year-over-year change of 23% [4] - 'Sales- Fine Dining' is forecasted at $386.57 million, reflecting a 3.7% increase from the prior year [4] Company-Owned Restaurants Metrics - 'Sales- LongHorn Steakhouse' is expected to reach $783.13 million, indicating a 7.2% increase from the previous year [5] - The total number of 'Company-owned restaurants' is estimated to be 2,174, up from 2,022 in the same quarter last year [5] - 'Company-owned restaurants - Olive Garden' is projected at 930, compared to 917 in the same quarter last year [5] Additional Company-Owned Restaurants Estimates - 'Company-owned restaurants - LongHorn Steakhouse' is expected to be 584, up from 572 in the same quarter last year [6] - 'Company-owned restaurants - Bahama Breeze' is projected to remain at 43, consistent with the previous year [6] - 'Company-owned restaurants - Seasons 52' is expected to reach 45, slightly up from 44 last year [7] - 'Company-owned restaurants - Eddie V's' is projected to remain at 30, unchanged from the previous year [7] - 'Company-owned restaurants - Yard House' is expected to be 89, up from 88 last year [8] - 'Company-owned restaurants - Cheddar's Scratch Kitchen' is projected at 183, compared to 181 in the same quarter last year [8] Stock Performance - Darden Restaurants shares have decreased by 2.7% over the past month, while the Zacks S&P 500 composite has declined by 7.7% [8]

Company Performance - Darden Restaurants (DRI) has returned 4.9% year-to-date, outperforming the Retail-Wholesale sector average of 2.4% [4] - The Zacks Consensus Estimate for DRI's full-year earnings has increased by 0.5% over the past 90 days, indicating improving analyst sentiment [4] - Darden Restaurants holds a Zacks Rank of 2 (Buy), suggesting a favorable earnings outlook [3] Industry Comparison - Darden Restaurants is part of the Retail - Restaurants industry, which has 39 companies and is currently ranked 71 in the Zacks Industry Rank [6] - The average return for the Retail - Restaurants industry this year is 6.1%, indicating that DRI is slightly underperforming its industry [6] - In contrast, Hagerty, Inc. (HGTY), another stock in the Retail-Wholesale sector, has returned 3.7% year-to-date and has a Zacks Rank of 2 (Buy) [5]

Core Insights - Darden Restaurants, Inc. is set to release its fiscal 2025 third quarter financial results on March 20, 2025, before market opening [1] - A conference call will follow at 8:30 am ET, where CEO Rick Cardenas and senior management will discuss the results and answer questions [1][2] Company Overview - Darden operates a diverse portfolio of restaurant brands, including Olive Garden, LongHorn Steakhouse, and Ruth's Chris Steak House, among others [2] - For more information about the company, visit their official website [2]

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].