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Darden Restaurants, Inc. (DRI - Free Report) reported solid first-quarter fiscal 2024 results, with earnings and revenues beating the Zacks Consensus Estimate. The metrics increased on a year-over-year basis.
Earnings & Revenues
During the fiscal first quarter, Darden reported adjusted earnings per share (EPS) of $1.78, beating the Zacks Consensus Estimate of $1.73. In the prior-year quarter, DRI reported an adjusted EPS of $1.56.
Total sales during the quarter came in at $2,730.6 million, beating the consensus mark of $2,704 million. Sales increased 11.6% from the prior-year quarter’s level on solid blended same-restaurant sales of 5%. The opening of 77 company-owned Ruth's Chris Steak House restaurants and 46 other 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 first quarter, sales at Olive Garden increased 8.6% year over year to $1,227.9 million. Our estimate for the metric was $1,284.9 million. Comps in the segment rose 6.1% year over year compared with a 4.4% growth reported in the previous quarter.
At LongHorn Steakhouse, sales were up 10.8% year over year to $669.8 million. Our estimate for the metric was $652.2 million. Comps in the segment rose 8.1% year over year compared with a 7.1% growth reported in the previous quarter.
Sales in Fine Dining increased 49.1% year over year to $273.5 million. Our estimate for the metric was $349.9 million. Comps in the segment declined 2.8% year over year compared with 1.9% fall reported in the previous quarter.
Sales at Other Business rose 6.1% year over year to $559.4 million. Our estimate for the metric was $563.1 million. Comps in the Other Business rose 1.7% year over year compared with a 2.2% increase reported in the previous quarter.
Operating Highlights
In the fiscal first quarter, total operating costs and expenses increased 12.5% year over year to $2,477.7 million. The escalation was primarily due to increased food and beverage costs, restaurant expenses and labor costs.
Balance Sheet
As of Aug 27, 2023, cash and cash equivalents came in at $192.1 million compared with $367.8 million as of May 28, 2023.
During the fiscal first quarter, inventories came in at $287 million compared with $287.9 million reported in the previous quarter. As of Aug 27, 2023, long-term debt was $1,477.1 million compared with $884.9 million as of May 28, 2023.
During the fiscal first quarter, Darden’s board of directors repurchased approximately 0.9 million shares of its common stock, worth approximately $143 million. As of Aug 27, the company stated the availability of approximately $509 million under the $1-billion repurchase program.
Darden declared a quarterly cash dividend of $1.31 per share. The dividend will be payable Nov 1, 2023, to its shareholders of record as of Oct 10, 2023.
Fiscal 2024 Outlook
For fiscal 2024, the company expects EPS from continuing operations to be in the band of $8.55-$8.85. Its mid-point of $8.7 is lower than the Zacks Consensus Estimate of $8.75.
Zacks Rank & Key Picks
Darden currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Zacks Retail-Wholesale sector are:
Kura Sushi USA, Inc. (KRUS - Free Report) sports a Zacks Rank #1 (Strong Buy). The company has a trailing four-quarter earnings surprise of 139.7% on average. Shares of KRUS have increased by 6.3% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for KRUS’s 2023 sales and EPS indicates 33.4% and 300% growth, respectively, from the year-ago period’s levels.
BJ's Restaurants, Inc. (BJRI - Free Report) sports a Zacks Rank #1. It has a trailing four-quarter earnings surprise of 121.2%, on average. Shares of BJRI have increased 2.1% in the past year.
The Zacks Consensus Estimate for BJRI’s 2023 sales and EPS indicates a 5.6% and a 447.1% growth, respectively, from the year-ago period’s levels.
Arcos Dorados Holdings Inc. (ARCO - Free Report) currently carries a Zacks Rank #2 (Buy). It has a trailing four-quarter earnings surprise of 35%, on average. The stock has gained 40.9% in the past year.
The Zacks Consensus Estimate for Arcos Dorados’ 2023 sales and EPS suggests rises of 19.2% and 13%, respectively, from the year-ago period’s levels.
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Darden (DRI) Q1 Earnings & Revenue Beat Estimates, Rise Y/Y
Darden Restaurants, Inc. (DRI - Free Report) reported solid first-quarter fiscal 2024 results, with earnings and revenues beating the Zacks Consensus Estimate. The metrics increased on a year-over-year basis.
Earnings & Revenues
During the fiscal first quarter, Darden reported adjusted earnings per share (EPS) of $1.78, beating the Zacks Consensus Estimate of $1.73. In the prior-year quarter, DRI reported an adjusted EPS of $1.56.
Total sales during the quarter came in at $2,730.6 million, beating the consensus mark of $2,704 million. Sales increased 11.6% from the prior-year quarter’s level on solid blended same-restaurant sales of 5%. The opening of 77 company-owned Ruth's Chris Steak House restaurants and 46 other 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 first quarter, sales at Olive Garden increased 8.6% year over year to $1,227.9 million. Our estimate for the metric was $1,284.9 million. Comps in the segment rose 6.1% year over year compared with a 4.4% growth reported in the previous quarter.
At LongHorn Steakhouse, sales were up 10.8% year over year to $669.8 million. Our estimate for the metric was $652.2 million. Comps in the segment rose 8.1% year over year compared with a 7.1% growth reported in the previous quarter.
Sales in Fine Dining increased 49.1% year over year to $273.5 million. Our estimate for the metric was $349.9 million. Comps in the segment declined 2.8% year over year compared with 1.9% fall reported in the previous quarter.
Sales at Other Business rose 6.1% year over year to $559.4 million. Our estimate for the metric was $563.1 million. Comps in the Other Business rose 1.7% year over year compared with a 2.2% increase reported in the previous quarter.
Operating Highlights
In the fiscal first quarter, total operating costs and expenses increased 12.5% year over year to $2,477.7 million. The escalation was primarily due to increased food and beverage costs, restaurant expenses and labor costs.
Balance Sheet
As of Aug 27, 2023, cash and cash equivalents came in at $192.1 million compared with $367.8 million as of May 28, 2023.
During the fiscal first quarter, inventories came in at $287 million compared with $287.9 million reported in the previous quarter. As of Aug 27, 2023, long-term debt was $1,477.1 million compared with $884.9 million as of May 28, 2023.
During the fiscal first quarter, Darden’s board of directors repurchased approximately 0.9 million shares of its common stock, worth approximately $143 million. As of Aug 27, the company stated the availability of approximately $509 million under the $1-billion repurchase program.
Darden declared a quarterly cash dividend of $1.31 per share. The dividend will be payable Nov 1, 2023, to its shareholders of record as of Oct 10, 2023.
Fiscal 2024 Outlook
For fiscal 2024, the company expects EPS from continuing operations to be in the band of $8.55-$8.85. Its mid-point of $8.7 is lower than the Zacks Consensus Estimate of $8.75.
Zacks Rank & Key Picks
Darden currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Zacks Retail-Wholesale sector are:
Kura Sushi USA, Inc. (KRUS - Free Report) sports a Zacks Rank #1 (Strong Buy). The company has a trailing four-quarter earnings surprise of 139.7% on average. Shares of KRUS have increased by 6.3% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for KRUS’s 2023 sales and EPS indicates 33.4% and 300% growth, respectively, from the year-ago period’s levels.
BJ's Restaurants, Inc. (BJRI - Free Report) sports a Zacks Rank #1. It has a trailing four-quarter earnings surprise of 121.2%, on average. Shares of BJRI have increased 2.1% in the past year.
The Zacks Consensus Estimate for BJRI’s 2023 sales and EPS indicates a 5.6% and a 447.1% growth, respectively, from the year-ago period’s levels.
Arcos Dorados Holdings Inc. (ARCO - Free Report) currently carries a Zacks Rank #2 (Buy). It has a trailing four-quarter earnings surprise of 35%, on average. The stock has gained 40.9% in the past year.
The Zacks Consensus Estimate for Arcos Dorados’ 2023 sales and EPS suggests rises of 19.2% and 13%, respectively, from the year-ago period’s levels.