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Darden Restaurants, Inc. (DRI - Free Report) reported second-quarter fiscal 2023 results, with earnings and revenues beating the Zacks Consensus Estimate. The metrics increased on a year-over-year basis. Following the results, the company’s shares moved up 1.3% in the pre-market trading session.
Darden president & CEO Rick Cardenas, stated "I am pleased with our results this quarter. All of our brands performed at a high level by remaining focused on our Back-to-Basics Operating Philosophy anchored in food, service and atmosphere.”
Earnings & Revenues
During the fiscal second quarter, Darden reported adjusted earnings per share (EPS) of $1.52, beating the Zacks Consensus Estimate of $1.41. In the prior-year quarter, DRI reported an adjusted EPS of $1.48.
Darden Restaurants, Inc. Price, Consensus and EPS Surprise
Total sales during the quarter came in at $2,486.5 million, beating the consensus mark of $2,427 million. Sales increased 9.4% from the prior-year quarter’s level on solid blended same-restaurant sales of 7.3%. The opening of 35 net new restaurants added to the positives.
Sales by Segments
Darden reports business under four segments, Olive Garden, LongHorn Steakhouse, Fine Dining, which includes The Capital Grille and Eddie V's, and Other Business.
During the fiscal second quarter, sales at Olive Garden increased 9.2% year over year to $1,176.7 million. Comps in the segment rose 7.6% year over year compared with a 2.3% growth reported in the previous quarter.
At LongHorn Steakhouse, sales were up 9.7% year over year to $600.5 million. Comps in the segment climbed 7.3% year over year compared with a 4.2% growth reported in the previous quarter.
Sales in Fine Dining soared 7% year over year to $202 million. Comps in the segment increased 5.9% year over year compared with a 7.6% growth reported in the previous quarter.
Sales at Other Business rose 10.5% year over year to $507.3 million. Comps in the Other Business rose 7.1% year over year compared with a 7.6% increase reported in the previous quarter.
Operating Highlights
In the fiscal second quarter, total operating costs and expenses increased 11% year over year to $2,253.3 million. This escalation was primarily due to a rise in food and beverage costs, restaurant expenses and labor costs.
Balance Sheet
As of Nov 27, 2022, cash and cash equivalents came in at $240.7 million compared with $377.5 million as of Aug 28, 2022.
Inventories during the fiscal second quarter came in at $296.1 million compared with $273.1 in the previous quarter. Long-term debt as of Nov 27, 2022, was $885.8 million compared with $895.1 million as of Aug 28, 2022.
During the fiscal second quarter, Darden’s board of directors repurchased 0.8 million shares of its common stock worth approximately $100 million. As of Nov 27, the company stated the availability of approximately $811 million under the $1 billion repurchase program.
Meanwhile, the company declared a quarterly cash dividend of $1.21 per share. The dividend will be payable on Feb 1, 2023, to shareholders of record as of Jan 10, 2023.
Fiscal 2023 Outlook
For fiscal 2023, the company expects sales to be approximately $10.3-$10.45 billion compared with the previous projection of $10.2-$10.4 billion. Same-restaurant sales in fiscal 2023 are anticipated to be 5-6.5% compared with the previous expectation of 4-6%. EPS from continuing operations are anticipated in the band of $7.60-$8. Its mid-point of $7.8 is higher than the Zacks Consensus Estimate of $7.68.
The company expects to open 55-60 net new restaurants and projects total capital spending of $525-$575 million in fiscal 2023.
Tecnoglass currently sports a Zacks Rank #1. Shares of the company have gained 20.4% in the past year.
The Zacks Consensus Estimate for TGLS’ 2023 sales and EPS suggests growth of 11.2% and 9%, respectively, from the year-ago period’s levels.
Wingstop carries a Zacks Rank #2 (Buy). WING has a long-term earnings growth rate of 12%. Shares of WING have declined 3.1% in the past year.
The Zacks Consensus Estimate for Wingstop’s 2023 sales and EPS suggests growth of 18.3% and 16.1%, respectively, from the comparable year-ago period’s levels.
Chuy’s Holdings currently carries a Zacks Rank #2. CHUY has a trailing four-quarter earnings surprise of 18.6%, on average. Shares of CHUY have increased 9.8% in the past year.
The Zacks Consensus Estimate for Chuy’s Holdings 2023 sales and EPS suggests growth of 8.6% and 10.4%, respectively, from the corresponding year-ago period’s levels.
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Darden (DRI) Q2 Earnings & Revenue Beat Estimates, Rise Y/Y
Darden Restaurants, Inc. (DRI - Free Report) reported second-quarter fiscal 2023 results, with earnings and revenues beating the Zacks Consensus Estimate. The metrics increased on a year-over-year basis. Following the results, the company’s shares moved up 1.3% in the pre-market trading session.
Darden president & CEO Rick Cardenas, stated "I am pleased with our results this quarter. All of our brands performed at a high level by remaining focused on our Back-to-Basics Operating Philosophy anchored in food, service and atmosphere.”
Earnings & Revenues
During the fiscal second quarter, Darden reported adjusted earnings per share (EPS) of $1.52, beating the Zacks Consensus Estimate of $1.41. In the prior-year quarter, DRI reported an adjusted EPS of $1.48.
Darden Restaurants, Inc. Price, Consensus and EPS Surprise
Darden Restaurants, Inc. price-consensus-eps-surprise-chart | Darden Restaurants, Inc. Quote
Total sales during the quarter came in at $2,486.5 million, beating the consensus mark of $2,427 million. Sales increased 9.4% from the prior-year quarter’s level on solid blended same-restaurant sales of 7.3%. The opening of 35 net new restaurants added to the positives.
Sales by Segments
Darden reports business under four segments, Olive Garden, LongHorn Steakhouse, Fine Dining, which includes The Capital Grille and Eddie V's, and Other Business.
During the fiscal second quarter, sales at Olive Garden increased 9.2% year over year to $1,176.7 million. Comps in the segment rose 7.6% year over year compared with a 2.3% growth reported in the previous quarter.
At LongHorn Steakhouse, sales were up 9.7% year over year to $600.5 million. Comps in the segment climbed 7.3% year over year compared with a 4.2% growth reported in the previous quarter.
Sales in Fine Dining soared 7% year over year to $202 million. Comps in the segment increased 5.9% year over year compared with a 7.6% growth reported in the previous quarter.
Sales at Other Business rose 10.5% year over year to $507.3 million. Comps in the Other Business rose 7.1% year over year compared with a 7.6% increase reported in the previous quarter.
Operating Highlights
In the fiscal second quarter, total operating costs and expenses increased 11% year over year to $2,253.3 million. This escalation was primarily due to a rise in food and beverage costs, restaurant expenses and labor costs.
Balance Sheet
As of Nov 27, 2022, cash and cash equivalents came in at $240.7 million compared with $377.5 million as of Aug 28, 2022.
Inventories during the fiscal second quarter came in at $296.1 million compared with $273.1 in the previous quarter. Long-term debt as of Nov 27, 2022, was $885.8 million compared with $895.1 million as of Aug 28, 2022.
During the fiscal second quarter, Darden’s board of directors repurchased 0.8 million shares of its common stock worth approximately $100 million. As of Nov 27, the company stated the availability of approximately $811 million under the $1 billion repurchase program.
Meanwhile, the company declared a quarterly cash dividend of $1.21 per share. The dividend will be payable on Feb 1, 2023, to shareholders of record as of Jan 10, 2023.
Fiscal 2023 Outlook
For fiscal 2023, the company expects sales to be approximately $10.3-$10.45 billion compared with the previous projection of $10.2-$10.4 billion. Same-restaurant sales in fiscal 2023 are anticipated to be 5-6.5% compared with the previous expectation of 4-6%. EPS from continuing operations are anticipated in the band of $7.60-$8. Its mid-point of $7.8 is higher than the Zacks Consensus Estimate of $7.68.
The company expects to open 55-60 net new restaurants and projects total capital spending of $525-$575 million in fiscal 2023.
Zacks Rank & Key Picks
Darden currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Some better-ranked stocks in the Zacks Retail-Wholesale sector are Tecnoglass Inc. (TGLS - Free Report) , Wingstop Inc. (WING - Free Report) and Chuy's Holdings, Inc. (CHUY - Free Report) .
Tecnoglass currently sports a Zacks Rank #1. Shares of the company have gained 20.4% in the past year.
The Zacks Consensus Estimate for TGLS’ 2023 sales and EPS suggests growth of 11.2% and 9%, respectively, from the year-ago period’s levels.
Wingstop carries a Zacks Rank #2 (Buy). WING has a long-term earnings growth rate of 12%. Shares of WING have declined 3.1% in the past year.
The Zacks Consensus Estimate for Wingstop’s 2023 sales and EPS suggests growth of 18.3% and 16.1%, respectively, from the comparable year-ago period’s levels.
Chuy’s Holdings currently carries a Zacks Rank #2. CHUY has a trailing four-quarter earnings surprise of 18.6%, on average. Shares of CHUY have increased 9.8% in the past year.
The Zacks Consensus Estimate for Chuy’s Holdings 2023 sales and EPS suggests growth of 8.6% and 10.4%, respectively, from the corresponding year-ago period’s levels.