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Darden (DRI) to Report Q3 Earnings: A Beat in the Cards?
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We expect Darden Restaurants, Inc. (DRI - Free Report) to beat expectations when it reports third-quarter fiscal 2017 financial numbers on Mar 28, before the opening bell.
Last quarter, Darden had posted a 1.59% positive earnings surprise. In fact, the company’s earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, with an average beat of 2.57%.
Let’s see how things are shaping up for this announcement.
Our proven model shows that Darden is likely to beat on earnings because it has the perfect combination of the two key ingredients.
Zacks ESP: Earnings ESP for Darden is +0.79% because the Most Accurate estimate is pegged at $1.28, while the Zacks Consensus Estimate stands at $1.27. This is a meaningful indicator of a likely positive earnings surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Darden currently holds a Zacks Rank #2 (Buy). Note that stocks with a Zacks Rank #1 (Strong Buy), 2 or 3 (Hold) have a significantly higher chance of beating earnings estimates. You can see the complete list of today’s Zacks #1 Rank stocks here.
Conversely, Sell-rated stocks (Zacks Rank #4 or 5) should never be considered going into an earnings announcement.
The combination of Darden‘s favorable Zacks Rank and positive ESP makes us reasonably confident of an earnings beat.
What is Driving the Better-than-Expected Earnings?
Darden’s earnings have surpassed the Zacks Consensus Estimate over the past nine consecutive quarters. Positive comps growth and costs-saving initiatives are driving the bottom line and are expected to boost the third-quarter results as well.
Meanwhile, management has been focusing on improving core operating fundamentals with initiatives like simplifying kitchen systems, better in-restaurant execution to enhance guest experience, menu innovation, remodeling along with various technology-driven moves. Backed by these initiatives, most of Darden’s brands have been witnessing growth over the past few quarters. We thus expect the trend to continue in the to-be-reported quarter.
However, increased labor costs and a non-franchised business model may dent the company’s profits, while a soft consumer spending environment in the U.S. restaurant space might restrict revenue growth.
Other Stocks to Consider
Darden is not the only company looking up this earnings season. Here are some other restaurant companies to consider as our model shows that they also have the right combination of elements to post an earnings beat this quarter:
Yum China Holdings, Inc. (YUMC - Free Report) has an Earnings ESP of +2.86% and a Zacks Rank #3.
Dave & Buster's Entertainment, Inc. (PLAY - Free Report) has an Earnings ESP of +1.72% and a Zacks Rank #3.
Panera Bread Company has an Earnings ESP of +1.67% and a Zacks Rank #3.
More Stock News: This Is Bigger than the iPhone!
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Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020. Click here for the 6 trades >>
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Darden (DRI) to Report Q3 Earnings: A Beat in the Cards?
We expect Darden Restaurants, Inc. (DRI - Free Report) to beat expectations when it reports third-quarter fiscal 2017 financial numbers on Mar 28, before the opening bell.
Last quarter, Darden had posted a 1.59% positive earnings surprise. In fact, the company’s earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, with an average beat of 2.57%.
Let’s see how things are shaping up for this announcement.
Darden Restaurants, Inc. Price and EPS Surprise
Darden Restaurants, Inc. Price and EPS Surprise | Darden Restaurants, Inc. Quote
Why a Likely Positive Surprise?
Our proven model shows that Darden is likely to beat on earnings because it has the perfect combination of the two key ingredients.
Zacks ESP: Earnings ESP for Darden is +0.79% because the Most Accurate estimate is pegged at $1.28, while the Zacks Consensus Estimate stands at $1.27. This is a meaningful indicator of a likely positive earnings surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Darden currently holds a Zacks Rank #2 (Buy). Note that stocks with a Zacks Rank #1 (Strong Buy), 2 or 3 (Hold) have a significantly higher chance of beating earnings estimates. You can see the complete list of today’s Zacks #1 Rank stocks here.
Conversely, Sell-rated stocks (Zacks Rank #4 or 5) should never be considered going into an earnings announcement.
The combination of Darden‘s favorable Zacks Rank and positive ESP makes us reasonably confident of an earnings beat.
What is Driving the Better-than-Expected Earnings?
Darden’s earnings have surpassed the Zacks Consensus Estimate over the past nine consecutive quarters. Positive comps growth and costs-saving initiatives are driving the bottom line and are expected to boost the third-quarter results as well.
Meanwhile, management has been focusing on improving core operating fundamentals with initiatives like simplifying kitchen systems, better in-restaurant execution to enhance guest experience, menu innovation, remodeling along with various technology-driven moves. Backed by these initiatives, most of Darden’s brands have been witnessing growth over the past few quarters. We thus expect the trend to continue in the to-be-reported quarter.
However, increased labor costs and a non-franchised business model may dent the company’s profits, while a soft consumer spending environment in the U.S. restaurant space might restrict revenue growth.
Other Stocks to Consider
Darden is not the only company looking up this earnings season. Here are some other restaurant companies to consider as our model shows that they also have the right combination of elements to post an earnings beat this quarter:
Yum China Holdings, Inc. (YUMC - Free Report) has an Earnings ESP of +2.86% and a Zacks Rank #3.
Dave & Buster's Entertainment, Inc. (PLAY - Free Report) has an Earnings ESP of +1.72% and a Zacks Rank #3.
Panera Bread Company has an Earnings ESP of +1.67% and a Zacks Rank #3.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020. Click here for the 6 trades >>