Darden Restaurants, Inc. (DRI) is one of the largest casual dining restaurant operators. In order to boost the performance of its brands, the company is implementing a set of initiatives under its Brand Renaissance Plan. Also, the company has laid down an aggressive cost management plan, under which it has been able to significantly reduce operating costs.
In Jul 2014, the company also sold one of its brands, Red Lobster. Despite its initiatives, the company has not been able to reap sufficient profits. Darden has been under pressure lately, as competition has made this sector a very tough one to be in for the short term. DRI's earnings have been comparatively sluggish over the past few quarters. Darden has delivered negative earnings surprise in one of the trailing four quarters and positive in one of the quarters. Meanwhile, it remained in-line in two of the quarters making for an average negative earnings surprise of 9.29% for the past four quarters. Meanwhile, revenues have posted negative revenue surprises in three of the trailing four quarters while remaining positive in the one of the quarters.
However, investors should also note the recent earnings estimate revisions for DRI, as the consensus estimate has been mostly moving upwards. Currently, DRI has a Zacks Rank #2 (Buy) but that could change following Darden's earnings report which was just released. We have highlighted some of the key stats from this just-revealed announcement below:
Earnings: DRI beats on earnings. Our consensus earnings estimate called for EPS of 84 cents per share, and the company reported EPS of 99 cents per share instead. Investors should note that these figures take out stock option expenses.
Revenues: DRI reported revenues of $1.731 billion. It marginally missed the consensus estimate of $1.733 billion.
Key Stats to Note: The company posted comps growth of 3.6% for fiscal third quarter 2015.
Darden increased earnings per share guidance for fiscal 2015 and expects it in the range of $2.45 to $2.48 per share. It expects earnings per share in the range of 91 cents to 94 cents per share for fiscal fourth quarter 2015, up 69% to 74% year over year.
