Back to top

Analyst Blog

Multi-concept, full-service restaurant operator Darden Restaurants Inc. (DRI - Analyst Report) recently announced that it has inked area development deals with two renowned Latin American restaurant operators, Grupo Piramide and Dosil S.A. to establish its presence in six Latin American countries − Guatemala, El Salvador, Honduras, Nicaragua and Costa Rica and Peru.

While Grupo Piramide will tap the first five regions and develop Darden's three key brands -- Red Lobster, Olive Garden and LongHorn Steakhouse -- in these countries, Dosil S.A. will concentrate only on Peru.  The terms of the deal were not disclosed.

Both these development partners are sought-after multi-brand restaurant operators with a presence in South and Central America and the Caribbean. While Grupo manages the operations of other American brands like Wendy’s Co. (WEN - Analyst Report), Yum! Brands Inc.’s (YUM - Analyst Report) KFC and Pizza Hut, Peru’s leading operator Dosil SA has taken charge of restaurant behemoths like Burger King Worldwide (BKW - Analyst Report) and Brinker International’s Chilli’s. Given their familiarity with local food habits and a strong presence in the same industry, we believe, both the parties remain strategic fits for Darden’s expansion plan.

Darden has been eyeing the Latin American markets for a long time. The latest deal will expand Darden’s presence in 12 markets throughout Latin America. In late February, this Orlando-based restaurateur signed a deal with International Meal Company (IMC) to enter four Latin American countries − Brazil, Colombia, the Dominican Republic and Panama.

Prior to this, in Jan 2013, Darden expanded its partnership agreement with Restaurant Operators to open its Red Lobster brand of restaurants in Puerto Rico. Notably, last year, this Zacks Rank #3 (Hold) company joined forces with a Mexican casual dining company, CMR, to enter the Mexican market. These above mentioned deals affirm management’s intent to make Latin America one of the prime markets for Darden’s international expansion. Darden sees tremendous growth potential in this market where it finds takers for American dining brands.

Further, the region’s middle-income population is also increasing, which could materially benefit the country’s food and beverage market. The company seeks to capitalize on this opportunity. We believe that the company is trying to expand beyond the U.S. in the midst of cut-throat competition in the rather saturated domestic casual dining market.

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
UTD THERAPE… UTHR 117.83 +28.51%
TRIQUINT SE… TQNT 20.67 +6.52%
VASCO DATA… VDSI 14.77 +4.68%
BANCO DO BR… BDORY 15.53 +3.95%
STRATTEC SE… STRT 80.24 +3.00%