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Darden Restaurants, Inc. (DRI - Free Report) reported fourth-quarter fiscal 2023 results, with earnings and revenues beating the Zacks Consensus Estimate. The metrics increased on a year-over-year basis.
Earnings & Revenues
During the fiscal fourth quarter, Darden reported adjusted earnings per share (EPS) of $2.58, beating the Zacks Consensus Estimate of $2.53. In the prior-year quarter, DRI reported an adjusted EPS of $2.24.
Total sales during the quarter came in at $2,769 million, beating the consensus mark of $2,767 million. Sales increased 6.4% from the prior-year quarter’s level on solid blended same-restaurant sales of 4%. The opening of 47 net new restaurants added to the positives.
Darden Restaurants, Inc. Price, Consensus and EPS Surprise
Darden reports business under four segments, Olive Garden, LongHorn Steakhouse, Fine Dining, including The Capital Grille and Eddie V's and Other Business.
During the fiscal fourth quarter, sales at Olive Garden increased 6.3% year over year to $1,269.2 million. Comps in the segment rose 4.4% year over year compared with a 12.3% growth reported in the previous quarter.
At LongHorn Steakhouse, sales were up 9.9% year over year to $711.7 million. Comps in the segment rose 7.1% year over year compared with a 10.8% growth reported in the previous quarter.
Sales in Fine Dining dropped 0.3% year over year to $209.8 million. Comps in the segment declined 1.9% year over year against growth of 11.7% reported in the previous quarter.
Sales at Other Business rose 4.9% year over year to $578.3 million. Comps in the Other Business rose 2.2% year over year compared with an 11.7% increase reported in the previous quarter.
Operating Highlights
In the fiscal fourth quarter, total operating costs and expenses increased 5.7% year over year to $2,394.5 million. The escalation was primarily due to a rise in food and beverage costs, restaurant expenses and labor costs.
Balance Sheet
As of May 28, 2023, cash and cash equivalents came in at $367.8 million compared with $275.3 million as of Feb 26, 2023.
Inventories during the fiscal fourth quarter came in at $287.9million compared with $305.9 million reported in the previous quarter. Long-term debt as of May 28, 2023, was $884.9 million compared with $880.9 million as of Feb 26, 2023.
During the fiscal fourth quarter, Darden’s board of directors repurchased approximately 0.2 million shares of its common stock, worth approximately $35.2 million. As of May 28, the company stated the availability of approximately $652 million under the $1-billion repurchase program.
The company announced a hike in its quarterly dividend payout. Darden raised its quarterly dividend by 8%, indicating its intention to utilize free cash to boost shareholders’ returns. The company raised the quarterly dividend to $1.31 per share (or $5.24 annually) from the previous payout of $1.21 (or $4.84 annually). The hiked dividend will be paid out on Aug 1, 2023, to shareholders on record as of Jul 10, 2023.
Fiscal 2023 Highlights
Total sales in fiscal 2023 came in at $10,487.8 million compared with $9,630 million in fiscal 2022.
Diluted EPS for fiscal 2023 came in at $8 compared with $7.40 reported in fiscal 2022.
Fiscal 2024 Outlook
For fiscal 2023, the company expects sales to be approximately $11.5-$11.6 billion. Same-restaurant sales in fiscal 2024 is anticipated in the range of 2.5-3.5%. EPS from continuing operations are anticipated in the band of $8.55-$8.85. Its mid-point of $8.7 is lower than the Zacks Consensus Estimate of $8.73.
The company expects to open approximately 50 net new restaurants and projects total capital spending of $550-$600 million in fiscal 2024.
Zacks Rank & Key Picks
Darden currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Zacks Retail-Wholesale sector are:
The Zacks Consensus Estimate for Chipotle’s 2024 sales and EPS suggests growth of 12.6% and 19.8%, respectively, from the year-ago period’s levels.
Chuy's Holdings, Inc. (CHUY - Free Report) sports a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 23.4%, on average. Shares of CHUY have increased 104.6% in the past year.
The Zacks Consensus Estimate for Chuy’s Holdings’ 2023 sales and EPS suggests growth of 9.9% and 27%, respectively, from the year-ago period’s levels.
Arcos Dorados Holdings Inc. (ARCO - Free Report) carries a Zacks Rank #2 (Buy). ARCO has a long-term earnings growth rate of 9.5%. The stock has rallied 39.4% in the past year.
The Zacks Consensus Estimate for Arcos Dorados’ 2023 sales and EPS suggests growth of 13.4% and 4.4%, respectively, from the year-ago period’s levels.
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Darden (DRI) Q4 Earnings & Revenues Beat Estimates, Rise Y/Y
Darden Restaurants, Inc. (DRI - Free Report) reported fourth-quarter fiscal 2023 results, with earnings and revenues beating the Zacks Consensus Estimate. The metrics increased on a year-over-year basis.
Earnings & Revenues
During the fiscal fourth quarter, Darden reported adjusted earnings per share (EPS) of $2.58, beating the Zacks Consensus Estimate of $2.53. In the prior-year quarter, DRI reported an adjusted EPS of $2.24.
Total sales during the quarter came in at $2,769 million, beating the consensus mark of $2,767 million. Sales increased 6.4% from the prior-year quarter’s level on solid blended same-restaurant sales of 4%. The opening of 47 net new restaurants added to the positives.
Darden Restaurants, Inc. Price, Consensus and EPS Surprise
Darden Restaurants, Inc. price-consensus-eps-surprise-chart | Darden Restaurants, Inc. Quote
Sales by Segments
Darden reports business under four segments, Olive Garden, LongHorn Steakhouse, Fine Dining, including The Capital Grille and Eddie V's and Other Business.
During the fiscal fourth quarter, sales at Olive Garden increased 6.3% year over year to $1,269.2 million. Comps in the segment rose 4.4% year over year compared with a 12.3% growth reported in the previous quarter.
At LongHorn Steakhouse, sales were up 9.9% year over year to $711.7 million. Comps in the segment rose 7.1% year over year compared with a 10.8% growth reported in the previous quarter.
Sales in Fine Dining dropped 0.3% year over year to $209.8 million. Comps in the segment declined 1.9% year over year against growth of 11.7% reported in the previous quarter.
Sales at Other Business rose 4.9% year over year to $578.3 million. Comps in the Other Business rose 2.2% year over year compared with an 11.7% increase reported in the previous quarter.
Operating Highlights
In the fiscal fourth quarter, total operating costs and expenses increased 5.7% year over year to $2,394.5 million. The escalation was primarily due to a rise in food and beverage costs, restaurant expenses and labor costs.
Balance Sheet
As of May 28, 2023, cash and cash equivalents came in at $367.8 million compared with $275.3 million as of Feb 26, 2023.
Inventories during the fiscal fourth quarter came in at $287.9million compared with $305.9 million reported in the previous quarter. Long-term debt as of May 28, 2023, was $884.9 million compared with $880.9 million as of Feb 26, 2023.
During the fiscal fourth quarter, Darden’s board of directors repurchased approximately 0.2 million shares of its common stock, worth approximately $35.2 million. As of May 28, the company stated the availability of approximately $652 million under the $1-billion repurchase program.
The company announced a hike in its quarterly dividend payout. Darden raised its quarterly dividend by 8%, indicating its intention to utilize free cash to boost shareholders’ returns. The company raised the quarterly dividend to $1.31 per share (or $5.24 annually) from the previous payout of $1.21 (or $4.84 annually). The hiked dividend will be paid out on Aug 1, 2023, to shareholders on record as of Jul 10, 2023.
Fiscal 2023 Highlights
Total sales in fiscal 2023 came in at $10,487.8 million compared with $9,630 million in fiscal 2022.
Diluted EPS for fiscal 2023 came in at $8 compared with $7.40 reported in fiscal 2022.
Fiscal 2024 Outlook
For fiscal 2023, the company expects sales to be approximately $11.5-$11.6 billion. Same-restaurant sales in fiscal 2024 is anticipated in the range of 2.5-3.5%. EPS from continuing operations are anticipated in the band of $8.55-$8.85. Its mid-point of $8.7 is lower than the Zacks Consensus Estimate of $8.73.
The company expects to open approximately 50 net new restaurants and projects total capital spending of $550-$600 million in fiscal 2024.
Zacks Rank & Key Picks
Darden currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Zacks Retail-Wholesale sector are:
Chipotle Mexican Grill, Inc. (CMG - Free Report) sports a Zacks Rank #1 (Strong Buy). CMG has a long-term earnings growth rate of 31.8%. The stock has surged 60.8% in the past year. You can see the complete list of today’s Zacks Rank #1 stocks here.
The Zacks Consensus Estimate for Chipotle’s 2024 sales and EPS suggests growth of 12.6% and 19.8%, respectively, from the year-ago period’s levels.
Chuy's Holdings, Inc. (CHUY - Free Report) sports a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 23.4%, on average. Shares of CHUY have increased 104.6% in the past year.
The Zacks Consensus Estimate for Chuy’s Holdings’ 2023 sales and EPS suggests growth of 9.9% and 27%, respectively, from the year-ago period’s levels.
Arcos Dorados Holdings Inc. (ARCO - Free Report) carries a Zacks Rank #2 (Buy). ARCO has a long-term earnings growth rate of 9.5%. The stock has rallied 39.4% in the past year.
The Zacks Consensus Estimate for Arcos Dorados’ 2023 sales and EPS suggests growth of 13.4% and 4.4%, respectively, from the year-ago period’s levels.