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Darden's (DRI) to Report Q3 Earnings: What's in the Offing?

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Darden Restaurants, Inc. (DRI - Free Report) is scheduled to report third-quarter fiscal 2022 results on Mar 24, before the opening bell. In the last reported quarter, the company delivered an earnings surprise of 3.5%.

Q3 Estimates

The Zacks Consensus Estimate for the fiscal third-quarter earnings is pegged at $2.11 per share, indicating a whopping growth of 115.3% year over year. The consensus mark for revenues stands at $2.54 billion, suggesting an increase of 46.3% from the year-ago quarter.

Factors to Note

Darden’s fiscal third-quarter performance is likely to have benefited from improvement in same-restaurant sales across its brands, business model enhancements and menu simplifications. The company has been gaining from technological enhancements with reference to online ordering, the introduction of To Go capacity management and Curbside I'm Here notification. Robust off-premise sales might have contributed to the to-be-reported quarter performance.

The company’s fiscal third-quarter results are likely to reflect the robust performance of Olive Garden, Fine Dining, and LongHorn Steakhouse. The Zacks Consensus Estimate for sales at Olive Garden, Fine Dining, and LongHorn Steakhouse is pegged at $1,216 million, $197 million and $598 million, suggesting year-over-year growth of 39.4%, 89.4% and 31.7%, respectively. In addition, the same for Other business stands at $499 million, indicating an increase of 65.2% from the prior-year quarter.

Despite solid cost management, higher labor costs due to increased wages may have weighed on profits in the quarter to be reported. The company is also apprehensive that inflationary costs might persist for the remainder of the year.

What the Zacks Model Unveils

Our proven model doesn’t predict an earnings beat for Darden Restaurants 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.

The company has an Earnings ESP of -1.59% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks Poised to Beat Earnings Estimates

Here are some stocks from the Zacks Retail-Wholesale sector that investors may consider as our model shows that these have the right combination of elements to post an earnings beat in the quarter to be reported:

Chipotle Mexican Grill, Inc. (CMG - Free Report) has an Earnings ESP of +2.28% and a Zacks Rank #3.

Shares of Chipotle's have gained 9.9% in the past year. CMG’s earnings beat the consensus mark in each of the trailing four quarters. The company has a trailing four-quarter earnings surprise of 11.2%, on average.

Dollar Tree, Inc. (DLTR - Free Report) has an Earnings ESP of +2.32% and a Zacks Rank #3.

Shares of Dollar Tree have appreciated 42.6% in the past year. DLTR’s earnings beat the consensus mark in each of the trailing four quarters, the average surprise being 11.8%.

The ONE Group Hospitality, Inc. (STKS - Free Report) has an Earnings ESP of +12.00% and a Zacks Rank #3.

Shares of The ONE Group have gained 45.6% in the past year. STKS’ earnings surpassed the consensus mark thrice in the trailing four quarters and missed once, the average surprise being 34.5%.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.