Darden Earnings Fail to Impress, With Chairman Departure
Darden Restaurants reported its better-than-expected fiscal third-quarter financial results before the markets opened on Tuesday.
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Darden Restaurants Inc. (NYSE: DRI) reported its fiscal third-quarter financial results before the markets opened on Tuesday. The company said it had $1.21 in earnings per share (EPS) on $1.85 billion in revenue. That compares to consensus estimates from Thomson Reuters of $1.19 in EPS on revenue of $1.84 billion. In the same period of last year, Darden posted EPS of $0.99 and $1.73 billion in revenue.
During this past quarter, same-restaurant sales increased 6.2%, and the company repurchased approximately $140 million of its outstanding common stock and retired $750 million in debt.
Darden projects fiscal 2016 adjusted diluted net earnings per share in the range of $3.48 to $3.52, reflecting the expectation that the company’s combined U.S. same-restaurant sales growth this fiscal year will be 3.0% to 3.5%. Consensus estimates call for $3.49 in EPS on $6.95 billion in revenue.
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Gene Lee, CEO of Darden, commented:
Our strong same-restaurant sales reinforce that our strategy is working as we continued to profitably grow market share during the quarter. Our teams are building loyalty every day with better guest experiences and improved value. Operating margins increased this quarter as we leveraged our sales growth and remained focused on disciplined cost management. Additionally, we returned over $200 million to shareholders through dividends and share repurchases this quarter.
Separately, the company announced that Jeffrey C. Smith resigned from the board of directors effective April 4. Smith had served as the company’s chairman of the board since October 2014. With the announcement of his departure, the board unanimously elected Charles M. Sonsteby, a current independent director, as chairman.
Shares of Darden were trading down 3.7% at $64.79 on Tuesday, with a consensus analyst price target of $70.48 and a 52-week trading range of $53.38 to $75.60.
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Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
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