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Darden (DRI) Beats on Q1 Earnings, Reaffirms FY18 Guidance
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Darden Restaurants, Inc. (DRI - Free Report) reported first-quarter fiscal 2018 adjusted earnings of 99 cents per share, beating the Zacks Consensus Estimate of 98 cents by over 1%. Further, earnings increased 12.5% year over year on the back of higher revenues. Notably, this quarter marked the 12th consecutive earnings beat for the company.
Meanwhile, total revenue of $1.94 billion came slightly above the Zacks Consensus Estimate of $1.93 billion and increased 12.9% year over year.
Behind the Headline Numbers
Since the beginning of fourth-quarter fiscal 2015, Darden started reporting under four new segments: Olive Garden, LongHorn Steakhouse, Fine Dining that includes The Capital Grille and Eddie V's, and Other Business. The Other Business segment include Yard House, Seasons 52, Bahama Breeze, consumer packaged goods, and franchise revenues.
In April 2017, Darden completed the acquisition of small restaurant chain, Cheddar's Scratch Kitchen (Cheddar's), in an all-cash deal worth $780 million from its stockholders including private-equity firms L Catterton and Oak Investment Partners. Excluding certain expenses, Darden anticipates the transaction to be accretive to its adjusted per share in fiscal 2018 by roughly 12 cents per share.
For the reported quarter, the company’s legacy brands posted blended comps growth of 1.7%. In the previous quarter, the company’s comps witnessed an increase of 3.3%, excluding Cheddar's. Meanwhile, the company witnessed an increase in sales across all its brands in the fiscal first quarter.
Sales at Olive Garden were up 3% year over year to $989.9 million. A 1.9% increase in comps at this segment was much lower than prior-quarter comps growth of 4.4%. Traffic fell 0.3%, while there was a 1.5% improvement in pricing and 0.7% growth in menu mix.
Sales at Fine Dining increased 7% to $122.2 million. Comps at The Capital Grille rose 2%, higher than the prior-quarter comps growth of 0.5%. Meanwhile, Eddie V's posted comps growth of 2.5%, lower than the 3.3% improvement recorded in the preceding quarter.
Revenues from Other Business jumped 66% year over year to $419.5 million. But comps at Seasons 52 fell 2.2% for the quarter, as compared to the prior-quarter comps’ decline of 1.3%. Moreover, comps at Yard House inched down 0.4% for the quarter against a 0.1% rise recorded in the last quarter. Meanwhile, comps grew 1.2% at Bahama Breeze, slightly lower than the comps growth of 1.4% in the preceding quarter.
At LongHorn Steakhouse, sales rose 4.7% to $404.5 million. Comps at LongHorn Steakhouse increased 2.6%, lower than the prior-quarter comps growth of 3.5%. Traffic increased 0.1%, while pricing and menu mix grew 1.5% and 1%, respectively.
For the reported quarter, comps at Cheddar's witnessed a decline of 1.4%
Darden Restaurants, Inc. Price, Consensus and EPS Surprise
The company reiterated its fiscal 2018 adjusted EPS guidance in the range of $4.38 to $4.50 per share. The Zacks Consensus Estimate for fiscal 2018 earnings is pegged at $4.45 per share.
Moreover, the company reaffirmed its outlook for total sales growth of 11.5% to 13% driven by the addition of Cheddar's and other new restaurant openings. Meanwhile, the company’s legacy brands are still anticipated to post comps growth of roughly 1% to 2%.
In the trailing four quarters, McDonald’s, Restaurant Brands and Bravo Brio pulled off an average positive earnings surprise of 7.44%, 6.46% and 28.27%, respectively.
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Darden (DRI) Beats on Q1 Earnings, Reaffirms FY18 Guidance
Darden Restaurants, Inc. (DRI - Free Report) reported first-quarter fiscal 2018 adjusted earnings of 99 cents per share, beating the Zacks Consensus Estimate of 98 cents by over 1%. Further, earnings increased 12.5% year over year on the back of higher revenues. Notably, this quarter marked the 12th consecutive earnings beat for the company.
Meanwhile, total revenue of $1.94 billion came slightly above the Zacks Consensus Estimate of $1.93 billion and increased 12.9% year over year.
Behind the Headline Numbers
Since the beginning of fourth-quarter fiscal 2015, Darden started reporting under four new segments: Olive Garden, LongHorn Steakhouse, Fine Dining that includes The Capital Grille and Eddie V's, and Other Business. The Other Business segment include Yard House, Seasons 52, Bahama Breeze, consumer packaged goods, and franchise revenues.
In April 2017, Darden completed the acquisition of small restaurant chain, Cheddar's Scratch Kitchen (Cheddar's), in an all-cash deal worth $780 million from its stockholders including private-equity firms L Catterton and Oak Investment Partners. Excluding certain expenses, Darden anticipates the transaction to be accretive to its adjusted per share in fiscal 2018 by roughly 12 cents per share.
For the reported quarter, the company’s legacy brands posted blended comps growth of 1.7%. In the previous quarter, the company’s comps witnessed an increase of 3.3%, excluding Cheddar's. Meanwhile, the company witnessed an increase in sales across all its brands in the fiscal first quarter.
Sales at Olive Garden were up 3% year over year to $989.9 million. A 1.9% increase in comps at this segment was much lower than prior-quarter comps growth of 4.4%. Traffic fell 0.3%, while there was a 1.5% improvement in pricing and 0.7% growth in menu mix.
Sales at Fine Dining increased 7% to $122.2 million. Comps at The Capital Grille rose 2%, higher than the prior-quarter comps growth of 0.5%. Meanwhile, Eddie V's posted comps growth of 2.5%, lower than the 3.3% improvement recorded in the preceding quarter.
Revenues from Other Business jumped 66% year over year to $419.5 million. But comps at Seasons 52 fell 2.2% for the quarter, as compared to the prior-quarter comps’ decline of 1.3%. Moreover, comps at Yard House inched down 0.4% for the quarter against a 0.1% rise recorded in the last quarter. Meanwhile, comps grew 1.2% at Bahama Breeze, slightly lower than the comps growth of 1.4% in the preceding quarter.
At LongHorn Steakhouse, sales rose 4.7% to $404.5 million. Comps at LongHorn Steakhouse increased 2.6%, lower than the prior-quarter comps growth of 3.5%. Traffic increased 0.1%, while pricing and menu mix grew 1.5% and 1%, respectively.
For the reported quarter, comps at Cheddar's witnessed a decline of 1.4%
Darden Restaurants, Inc. Price, Consensus and EPS Surprise
Darden Restaurants, Inc. Price, Consensus and EPS Surprise | Darden Restaurants, Inc. Quote
Fiscal 2018 Outlook
The company reiterated its fiscal 2018 adjusted EPS guidance in the range of $4.38 to $4.50 per share. The Zacks Consensus Estimate for fiscal 2018 earnings is pegged at $4.45 per share.
Moreover, the company reaffirmed its outlook for total sales growth of 11.5% to 13% driven by the addition of Cheddar's and other new restaurant openings. Meanwhile, the company’s legacy brands are still anticipated to post comps growth of roughly 1% to 2%.
Zacks Rank & Stocks to Consider
Darden currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in this sector include McDonald’s Corporation (MCD - Free Report) , Restaurant Brands International Inc. (QSR - Free Report) and Bravo Brio Restaurant Group, Inc. holding a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
In the trailing four quarters, McDonald’s, Restaurant Brands and Bravo Brio pulled off an average positive earnings surprise of 7.44%, 6.46% and 28.27%, respectively.
Can Hackers Put Money INTO Your Portfolio?
Earlier this month, credit bureau Equifax announced a massive data breach affecting 2 out of every 3 Americans. The cybersecurity industry is expanding quickly in response to this and similar events. But some stocks are better investments than others.
Zacks has just released Cybersecurity! An Investor’s Guide to help Zacks.com readers make the most of the $170 billion per year investment opportunity created by hackers and other threats. It reveals 4 stocks worth looking into right away.
Download the new report now>>