Darden Restaurants Stock Rises On Strong Q2 Earnings: Retail’s Upbeat
By Stocktwits Inc | First Published Dec 21, 2024, 1:21 AM ISTDarden Restaurants also upped its annual sales outlook, coming on the back of higher menu prices
Shares of Darden Restaurants Inc. ($DRI) were up more than 2% on Friday afternoon as the restaurant chain reported better-than-expected second-quarter earnings, lifting retail sentiment.
Earnings per share came in at $2.03, above the $2.02 estimated by Wall Street analysts. Its revenues also beat expectations coming at $2.89 billion compared to $2.87 billion estimated by Wall Street.
Latest Videos
"We had a strong quarter and I am pleased that our four largest brands – Olive Garden, LongHorn Steakhouse, Yard House and Cheddar's Scratch Kitchen – generated positive same-restaurant sales, as did three of our four business segments," Darden President & CEO, Rick Cardena, said in a statement.
DRI’s overall sales rose 6.6% over last year. Same restaurant sales grew 2.4% overall with Olive Garden growing at 2% and LongHorn Steakhouse at 7.5%. Its adjusted diluted EPS grew 10% over last year.
Olive Garden’s segment profit margin came in at 21.4%, a 40 basis points increase over last year; LongHorn Steakhouse’s segment profit margins were at 18.9%, a 50 basis point increase from last year.
However, the company noted that certain restaurants and North Carolina were impacted by hurricanes Helene and Milton.
Retail sentiment on Stockwits has stayed ‘extremely bullish’ over the past day with message volumes also staying consistent in the ‘extremely high’ zones.
Following the earnings, BMO Capital raised the firm's price target to $175 from $165 with a ‘Market Perform’ rating, The Fly.com reported. According to the firm, the company's "slight" Q2 earnings beat showed stronger comp sales and lower food costs, even though its relative performance to the industry remains challenged.
Raymond James’ analyst Brian Vaccaro also raised the firm's price target to $200 from $187 with an ‘Outperform’ rating, highlighting it reported "encouraging" Q2 results that reflected a return to positive comps at Olive Garden and "impressive" strength at Longhorn.
Darden Restaurants also upped its annual sales outlook, coming on the back of higher menu prices, and better numbers at LongHorn Steakhouse and Olive Garden, during the holiday season.
It expects same-restaurant sales growth of about 1.5%, excluding Ruth's Chris and Chuy's as they were not owned during the fiscal under consideration.
Its diluted net EPS from continuing operations are estimated to be between $9.40 to $9.60.
DRI’s stock is up 19% year-to-date.
For updates and corrections, email newsroom[at]stocktwits[dot]com.<
subscribe to Asianet Newsable WhatsApp channel by clicking here. For more reliable and latest news
subscribe to Asianet Newsable Telegram channel by clicking here.