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Darden Restaurants (DRI) Tops Q2 Earnings on Revenue Growth

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Darden Restaurants, Inc. (DRI - Free Report) is one of the largest casual dining restaurant operators. Beginning fiscal fourth quarter 2015, the company began reporting its business in four segments: Olive Garden, LongHorn Steakhouse, Fine Dining, which includes The Capital Grille and Eddie V's, and Other Business.

Most of Darden’s brands have been witnessing growth over the past three to four quarters on the back of sales initiatives like simplifying kitchen systems, menu innovation and technology-driven moves. Moreover, the company’s Olive Garden Brand Renaissance plan – aimed to turn around its business – has started reaping benefits. Also, the company’s efforts to check costs are commendable.

However, Darden’s higher costs, limited international presence along with a soft consumer spending environment raises concern.

Investors should note that the consensus estimate for DRI has hardly witnessed any significant movement over the last 60 days. Meanwhile, DRI’s earnings have been strong over the past few quarters. In fact, the company’s earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, with an average beat of 9.32%. However, revenues posted positive surprises in just one of the trailing four quarters.

DARDEN RESTRNT Price and EPS Surprise

 

DARDEN RESTRNT Price and EPS Surprise | DARDEN RESTRNT Quote

DRI currently has a Zacks Rank #3 (Hold) but that could change following Darden’s earnings report which was just released. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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 earnings per share of 63 cents, and the company reported earnings of 64 cents per share. Investors should note that these figures take out stock option expenses.

Revenues: DRI reported revenues of $1.64 billion, slightly lagging the Zacks consensus estimate of $1.65 billion.

Key Stats to Note: In second-quarter fiscal 2017, the company posted comps growth of 1.7% with comps at Olive Garden increasing 2.6%.

Stock Price Impact: In-active in pre-market trading.

Check back for our full write up on this DRI earnings report later!

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