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Will Darden's Earnings Trigger Another 5.8% Stock Surge?
Forbes· 2025-09-17 13:50
Core Insights - Darden Restaurants is expected to announce fiscal Q1 2025 results on September 18, with analysts predicting earnings of $2.01 per share and revenue of $3.04 billion, reflecting a 15% growth in EPS and a 10% increase in sales compared to the previous year [2] Financial Performance - In Q4 FY2024, Darden's sales rose by 7% to $2.96 billion, while same-store sales remained unchanged, with Olive Garden showing weakness and LongHorn performing well [3] - EPS for Q4 FY2024 increased to $2.65 due to cost control and lower food inflation, alongside a dividend increase and $97 million in stock buybacks enhancing shareholder engagement [3] - For FY2025, management forecasts 1-2% growth in same-store sales, with projected revenue between $11.8 billion and $11.9 billion, and EPS expected to be between $9.40 and $9.60 [3] Market Position and Historical Performance - Darden Restaurants has a market capitalization of $25 billion, with trailing twelve-month revenue of $12 billion, operating profit of $1.4 billion, and net income of $1.0 billion [3] - Historically, Darden stock has advanced 55% of the time following earnings announcements, with an average one-day gain of 5.8% and a maximum increase of 15% [2][4] Trading Strategies - Investors can choose to position themselves before the earnings announcement based on historical probabilities or wait to capitalize on post-earnings movements [3] - The correlation between 1D, 5D, and 21D returns post-earnings indicates that a positive 1D return may lead to favorable 5D returns, suggesting a potential trading strategy [5]