Darden to Report Q2 Earnings: What's in Store for the Stock?

Core Viewpoint - Darden Restaurants, Inc. is set to report its second-quarter fiscal 2025 results on December 19, with expectations of earnings growth and increased revenues compared to the previous year [1][3]. Group 1: Earnings Expectations - The Zacks Consensus Estimate for fiscal Q2 earnings per share (EPS) is $2.05, reflecting an 11.4% increase from $1.84 in the same quarter last year [3]. - Revenue expectations are pegged at $2.9 billion, indicating a 5.3% rise from the previous year's figure [3]. Group 2: Factors Influencing Performance - Darden's performance is anticipated to benefit from culinary innovation, improved guest satisfaction, and strategic marketing initiatives [5]. - The company has refined core menu items and introduced new culinary options, enhancing its appeal to a broader customer base [5][6]. - Investments in restaurant maintenance and remodels are expected to improve dining environments and guest experiences [7]. Group 3: Marketing and Sales Strategies - Darden's marketing efforts, including the "Never Ending Pasta Bowl" promotion, are likely to have contributed to sales growth without heavy discounting [8]. - The use of digital and connected TV marketing strategies is expected to have driven incremental sales during the quarter [8]. Group 4: Revenue and Cost Projections - Revenue from Olive Garden and LongHorn Steakhouse is projected to rise by 3.7% to $1.3 billion and 6.9% to $0.7 billion, respectively [9]. - Food, beverage, and labor costs are expected to increase by 4.1% and 4.9% year over year, reaching $880 million and $924 million, respectively [9]. Group 5: Earnings Prediction Model - The current model does not predict an earnings beat for Darden, with an Earnings ESP of -2.58% [10]. - Darden holds a Zacks Rank of 3, indicating a neutral outlook [11].