We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Darden's Earnings and Revenues Underperform Estimates in Q1
Read MoreHide Full Article
Darden Restaurants, Inc. (DRI - Free Report) reported dismal first-quarter fiscal 2025 results, with earnings and revenues missing the Zacks Consensus Estimate. On a year-over-year basis, the top line increased, but the bottom line declined.
The quarterly earnings fell short of expectations due to a significant drop in traffic during July. However, since then, the company has seen an improvement in sales trends. Considering this recovery and the planned initiatives for the rest of the fiscal year, the company reaffirmed its guidance for fiscal 2025. The stock inched up 9.4% in the pre-market trading session.
Earnings & Revenues
During the fiscal first quarter, Darden reported adjusted earnings per share (EPS) of $1.75, missing the Zacks Consensus Estimate of $1.81. In the prior-year quarter, DRI reported an adjusted EPS of $1.78.
Darden Restaurants, Inc. Price, Consensus and EPS Surprise
Total sales during the quarter came in at $2.76 billion, missing the consensus mark of $2.80 billion. Sales inched up 1% from the prior-year quarter’s level. The upside was backed by contributions from 42 net new restaurants, partially offset by a blended same-restaurant sales decline of 1.1%.
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 dropped 1.5% year over year to $1.21 billion. Our estimate for the metric was $1.26 billion. Comps in the segment fell 2.9% year over year compared with a 1.5% fall reported in the previous quarter.
At LongHorn Steakhouse, sales were up 9.2% year over year to $731.5 million. Our estimate for the metric was $694.3 million. Comps in the segment rose 3.7% year over year compared with 4.0% growth reported in the previous quarter.
Sales in Fine Dining increased 2% year over year to $278.9 million. Our estimate for the metric was $290.1 million. Comps in the segment fell 6.0% year over year compared with a 2.6% drop reported in the previous quarter.
Sales in Other Business declined 0.7% year over year to $555.5 million. Our estimate for the metric was $571.3 million. Comps in the Other Business dropped 1.8% year over year compared with a 1.1% fall reported in the previous quarter.
Operating Highlights
In the fiscal first quarter, total operating costs and expenses inched up 0.4% year over year to $2.49 billion. The upside was primarily due to increased restaurant expenses, labor costs and marketing expenses. The figure compares to our projection of $2.52 billion.
Balance Sheet
As of Aug. 25, 2024, cash and cash equivalents came in at $192.5 million compared with $194.8 million as of May 26.
During the fiscal first quarter, inventories came in at $297.7 million compared with $290.5 million reported in the previous quarter. As of Aug. 25, 2024, long-term debt was $1.39 billion compared with $1.37 million as of May 26.
During the fiscal first quarter, Darden’s board of directors repurchased approximately 1.2 million shares of its common stock, worth approximately $172 million. As of the fiscal first quarter, the company stated availability of approximately $743 million under the $1-billion repurchase authorization.
Fiscal 2025 Outlook Retained
For the fiscal 2025, the company expects total sales to be in the range of $11.8-$11.9 billion. Same-restaurant sales growth in the fiscal 2025 is anticipated to be in the range of 1-2% year over year. Diluted EPS from continuing operations are anticipated in the band of $9.40-$9.60.
The company expects to open 45-50 net new restaurants and projects a total capital spending of $550-$600 million in the fiscal 2025.
DRI’s Zacks Rank & Key Picks
Darden currently carries a Zacks Rank #3 (Hold).
Here are some better-ranked stocks from the Zacks Retail-Wholesale sector.
ANF has a trailing four-quarter earnings surprise of 28%, on average. The stock has surged 169.6% in the past year. The Zacks Consensus Estimate for ANF’s fiscal 2024 sales and earnings per share (EPS) indicates growth of 13.1% and 63.4%, respectively, from the year-ago period’s levels.
Boot Barn Holdings, Inc. (BOOT - Free Report) currently sports a Zacks Rank of 1. BOOT has a trailing four-quarter earnings surprise of 7.1%, on average. The stock has gained 93% in the past year.
The consensus estimate for BOOT’s fiscal 2025 sales and EPS indicates growth of 11.6% and 10.7%, respectively, from the year-ago period’s levels.
Sprouts Farmers Market, Inc. (SFM - Free Report) currently sports a Zacks Rank of 1. SFM has a trailing four-quarter earnings surprise of 12%, on average. The stock has risen 157% in the past year.
The Zacks Consensus Estimate for SFM’s 2024 sales and EPS indicates a rise of 9.6% and 18.7%, respectively, from the year-ago period’s levels.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Darden's Earnings and Revenues Underperform Estimates in Q1
Darden Restaurants, Inc. (DRI - Free Report) reported dismal first-quarter fiscal 2025 results, with earnings and revenues missing the Zacks Consensus Estimate. On a year-over-year basis, the top line increased, but the bottom line declined.
The quarterly earnings fell short of expectations due to a significant drop in traffic during July. However, since then, the company has seen an improvement in sales trends. Considering this recovery and the planned initiatives for the rest of the fiscal year, the company reaffirmed its guidance for fiscal 2025. The stock inched up 9.4% in the pre-market trading session.
Earnings & Revenues
During the fiscal first quarter, Darden reported adjusted earnings per share (EPS) of $1.75, missing the Zacks Consensus Estimate of $1.81. In the prior-year quarter, DRI reported an adjusted EPS of $1.78.
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 $2.76 billion, missing the consensus mark of $2.80 billion. Sales inched up 1% from the prior-year quarter’s level. The upside was backed by contributions from 42 net new restaurants, partially offset by a blended same-restaurant sales decline of 1.1%.
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 dropped 1.5% year over year to $1.21 billion. Our estimate for the metric was $1.26 billion. Comps in the segment fell 2.9% year over year compared with a 1.5% fall reported in the previous quarter.
At LongHorn Steakhouse, sales were up 9.2% year over year to $731.5 million. Our estimate for the metric was $694.3 million. Comps in the segment rose 3.7% year over year compared with 4.0% growth reported in the previous quarter.
Sales in Fine Dining increased 2% year over year to $278.9 million. Our estimate for the metric was $290.1 million. Comps in the segment fell 6.0% year over year compared with a 2.6% drop reported in the previous quarter.
Sales in Other Business declined 0.7% year over year to $555.5 million. Our estimate for the metric was $571.3 million. Comps in the Other Business dropped 1.8% year over year compared with a 1.1% fall reported in the previous quarter.
Operating Highlights
In the fiscal first quarter, total operating costs and expenses inched up 0.4% year over year to $2.49 billion. The upside was primarily due to increased restaurant expenses, labor costs and marketing expenses. The figure compares to our projection of $2.52 billion.
Balance Sheet
As of Aug. 25, 2024, cash and cash equivalents came in at $192.5 million compared with $194.8 million as of May 26.
During the fiscal first quarter, inventories came in at $297.7 million compared with $290.5 million reported in the previous quarter. As of Aug. 25, 2024, long-term debt was $1.39 billion compared with $1.37 million as of May 26.
During the fiscal first quarter, Darden’s board of directors repurchased approximately 1.2 million shares of its common stock, worth approximately $172 million. As of the fiscal first quarter, the company stated availability of approximately $743 million under the $1-billion repurchase authorization.
Fiscal 2025 Outlook Retained
For the fiscal 2025, the company expects total sales to be in the range of $11.8-$11.9 billion. Same-restaurant sales growth in the fiscal 2025 is anticipated to be in the range of 1-2% year over year. Diluted EPS from continuing operations are anticipated in the band of $9.40-$9.60.
The company expects to open 45-50 net new restaurants and projects a total capital spending of $550-$600 million in the fiscal 2025.
DRI’s Zacks Rank & Key Picks
Darden currently carries a Zacks Rank #3 (Hold).
Here are some better-ranked stocks from the Zacks Retail-Wholesale sector.
Abercrombie & Fitch Co. (ANF - Free Report) currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
ANF has a trailing four-quarter earnings surprise of 28%, on average. The stock has surged 169.6% in the past year. The Zacks Consensus Estimate for ANF’s fiscal 2024 sales and earnings per share (EPS) indicates growth of 13.1% and 63.4%, respectively, from the year-ago period’s levels.
Boot Barn Holdings, Inc. (BOOT - Free Report) currently sports a Zacks Rank of 1. BOOT has a trailing four-quarter earnings surprise of 7.1%, on average. The stock has gained 93% in the past year.
The consensus estimate for BOOT’s fiscal 2025 sales and EPS indicates growth of 11.6% and 10.7%, respectively, from the year-ago period’s levels.
Sprouts Farmers Market, Inc. (SFM - Free Report) currently sports a Zacks Rank of 1. SFM has a trailing four-quarter earnings surprise of 12%, on average. The stock has risen 157% in the past year.
The Zacks Consensus Estimate for SFM’s 2024 sales and EPS indicates a rise of 9.6% and 18.7%, respectively, from the year-ago period’s levels.