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Factors Setting the Tone for Darden's (DRI) Q2 Earnings
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Darden Restaurants, Inc. (DRI - Free Report) is scheduled to report second-quarter fiscal 2023 results on Dec 16, 2022, before the opening bell. In the previous quarter, the company’s earnings matched the Zacks Consensus Estimate of $1.56.
How Are Estimates Placed?
The Zacks Consensus Estimate for the fiscal second-quarter earnings per share (EPS) is pegged at $1.42, indicating a decline of 4.1% from $1.48 reported in the year-ago quarter.
For revenues, the consensus mark is pegged at $2,426 million, suggesting a 6.8% increase from the year-ago quarter’s figure.
Let's look at how things have shaped up in the quarter.
Factors at Play
Darden’s fiscal second-quarter performance is likely to have benefited from unit-expansion efforts, the To-Go platform and menu modifications. This and the focus on staffing levels and technological investments for off-premise and in-restaurant dining occasions are likely to have driven the company’s top line in the fiscal second quarter. During the previous quarter, digital transactions accounted for 32% of all off-premise sales and 10% of Darden's total sales. With more focus on culinary innovation, attentive service, guest engagement and integrated marketing efforts, the momentum is likely to have persisted in the to-be-reported quarter.
Solid segmental performance is likely to have supported the company’s performance in the fiscal second quarter. The Zacks Consensus Estimate for sales at Olive Garden, Fine Dining, and LongHorn Steakhouse is pegged at $1,128 million, $210 million and $592 million, suggesting year-over-year growth of 4.7%, 11.1% and 8.2%, respectively. In addition, the same for Other business is pegged at $494 million, indicating an increase of 7.6% from the prior-year quarter figure.
Elevated wage pressures and commodities inflation (of approximately 13%) are likely to have pressurized the fiscal second quarter bottom line. This and supply chain disruptions are likely to have affected the company’s performance in the to-be-reported quarter.
What Our Model Says
Our proven model predicts an earnings beat for Darden this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.
Earnings ESP: Darden has an Earnings ESP of +3.03%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Here are some other stocks worth considering from the Zacks Retail-Wholesale sector, as our model shows that these have the right combination of elements to beat on earnings this season:
Wingstop Inc. (WING - Free Report) has an Earnings ESP of +17.37% and a Zacks Rank #2.
Shares of Wingstop have declined 3% in the past year. WING’s earnings surpassed the estimates twice in the trailing four quarters and missed twice, the average surprise being 5.8%.
The Kroger Co. (KR - Free Report) currently has an Earnings ESP of +0.59% and a Zacks Rank #3.
Shares of Kroger have increased 2.5% in the past year. KR’s earnings beat the consensus mark in each of the last four quarters. The company has a trailing four-quarter earnings surprise of 13.4%, on average.
Starbucks Corporation (SBUX - Free Report) currently has an Earnings ESP of +0.92% and a Zacks Rank #3.
Shares of Starbucks have declined 10.5% in the past year. SBUX’s earnings surpassed the estimates twice in the trailing four quarters and missed twice, the average surprise being 2.1%.
Image: Bigstock
Factors Setting the Tone for Darden's (DRI) Q2 Earnings
Darden Restaurants, Inc. (DRI - Free Report) is scheduled to report second-quarter fiscal 2023 results on Dec 16, 2022, before the opening bell. In the previous quarter, the company’s earnings matched the Zacks Consensus Estimate of $1.56.
How Are Estimates Placed?
The Zacks Consensus Estimate for the fiscal second-quarter earnings per share (EPS) is pegged at $1.42, indicating a decline of 4.1% from $1.48 reported in the year-ago quarter.
For revenues, the consensus mark is pegged at $2,426 million, suggesting a 6.8% increase from the year-ago quarter’s figure.
Darden Restaurants, Inc. Price and EPS Surprise
Darden Restaurants, Inc. price-eps-surprise | Darden Restaurants, Inc. Quote
Let's look at how things have shaped up in the quarter.
Factors at Play
Darden’s fiscal second-quarter performance is likely to have benefited from unit-expansion efforts, the To-Go platform and menu modifications. This and the focus on staffing levels and technological investments for off-premise and in-restaurant dining occasions are likely to have driven the company’s top line in the fiscal second quarter. During the previous quarter, digital transactions accounted for 32% of all off-premise sales and 10% of Darden's total sales. With more focus on culinary innovation, attentive service, guest engagement and integrated marketing efforts, the momentum is likely to have persisted in the to-be-reported quarter.
Solid segmental performance is likely to have supported the company’s performance in the fiscal second quarter. The Zacks Consensus Estimate for sales at Olive Garden, Fine Dining, and LongHorn Steakhouse is pegged at $1,128 million, $210 million and $592 million, suggesting year-over-year growth of 4.7%, 11.1% and 8.2%, respectively. In addition, the same for Other business is pegged at $494 million, indicating an increase of 7.6% from the prior-year quarter figure.
Elevated wage pressures and commodities inflation (of approximately 13%) are likely to have pressurized the fiscal second quarter bottom line. This and supply chain disruptions are likely to have affected the company’s performance in the to-be-reported quarter.
What Our Model Says
Our proven model predicts an earnings beat for Darden this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.
Earnings ESP: Darden has an Earnings ESP of +3.03%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: The company has a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Other Stocks Poised to Beat on Earnings
Here are some other stocks worth considering from the Zacks Retail-Wholesale sector, as our model shows that these have the right combination of elements to beat on earnings this season:
Wingstop Inc. (WING - Free Report) has an Earnings ESP of +17.37% and a Zacks Rank #2.
Shares of Wingstop have declined 3% in the past year. WING’s earnings surpassed the estimates twice in the trailing four quarters and missed twice, the average surprise being 5.8%.
The Kroger Co. (KR - Free Report) currently has an Earnings ESP of +0.59% and a Zacks Rank #3.
Shares of Kroger have increased 2.5% in the past year. KR’s earnings beat the consensus mark in each of the last four quarters. The company has a trailing four-quarter earnings surprise of 13.4%, on average.
Starbucks Corporation (SBUX - Free Report) currently has an Earnings ESP of +0.92% and a Zacks Rank #3.
Shares of Starbucks have declined 10.5% in the past year. SBUX’s earnings surpassed the estimates twice in the trailing four quarters and missed twice, the average surprise being 2.1%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.