Earnings Previews: Darden Restaurants, FedEx, KB Home

After U.S. markets closed on Monday, Stitch Fix reported a wider-than-expected loss per share and revenue that beat low expectations. Revenue was down 22% year over year. It got worse. The company issued downside revenue guidance for the current quarter and downside revenue guidance for the full year. New CEO Matt Baer outlined a cost-saving program and committed to emphasizing profitability. Shares traded up about 3.5% shortly after Tuesday’s opening bell.

General Mills is on deck to report quarterly earnings before markets open on Wednesday.

Here are previews of three companies scheduled to report earnings late Wednesday or early Thursday morning.

Darden Restaurants

Darden Restaurants Inc. (NYSE: DRI), the owner and operator of more than 1,800 restaurant locations, including Olive Garden and Longhorn Steakhouse, has added 15% to its share price over the past 12 months. Since reporting fiscal fourth-quarter results in June, Darden’s stock price has dropped by about 7.4%. As a value play, however, Darden’s generous dividend and solid payout ratio attract investors looking for consistent income. The company reports quarterly results early Thursday.

Of 30 analysts covering the stock, 19 have a Buy or Strong Buy rating and another 11 have rated it at Hold. At a recent share price of around $149.00, the implied upside to a median price target of $175.00 is 17.4%. At the high price target of $188.00, the upside potential is 26.2%.

Fiscal first-quarter revenue is forecast at $2.71 billion, which would be down 2.2% sequentially but up 10.6% year over year. Adjusted EPS are forecast at $1.74, down 33.1% sequentially and 13.7% higher year over year. For the full 2024 fiscal year that ends in May, estimates call for EPS of $8.76, up 10.5%, on sales of $11.57 billion, up 10.3%.

Darden stock trades at 17.0 times expected 2024 EPS, 15.4 times estimated 2025 earnings of $9.68 and 14.2 times estimated 2026 earnings of $10.49 per share. Its 52-week trading range is $120.20 to $173.06. Darden pays an annual dividend of $5.24 (yield of 3.45%). Total shareholder return for the past year was 18.87%.


For the year to date, shares of FedEx Corp. (NYSE: FDX) are up nearly 55%. Since posting a 52-week high in late July, however, the stock has dropped by about 7.4%, largely due to an announcement from Amazon that the e-commerce giant was restarting its Amazon Shipping service after suspending it during the pandemic.

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