Darden Restaurants Sees Handy Gain on Strong Sales, Rosy Outlook

Darden Restaurants Inc. (NYSE: DRI) released its fiscal second-quarter financial results before the markets opened on Tuesday. The company said that it had $0.73 in earnings per share (EPS) and $1.88 billion in revenue, which compares with consensus estimates from Thomson Reuters of $0.70 in EPS and revenue of $1.85 billion. The same period of last year reportedly had EPS of $0.64 and $1.64 billion in revenue.

During the quarter, blended same-restaurant sales from Darden’s legacy brands increased 3.1%. The best performer of the group was Eddie V’s, which saw same-restaurant sales increase by 6.8%.

For the fiscal 2018 full year, the company expects to see same-restaurant sales growth of roughly 2%, total sales growth of 13% and EPS in the range of $4.45 to $4.53. The consensus estimates call for $4.44 in EPS and $8.04 billion in revenue for the fiscal 2018 full year.

Darden’s cash and cash equivalents totaled $114.7 million at the end of the quarter, down from $233.1 million at the end of the previous fiscal year.

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CEO Gene Lee commented:

Our strong same-restaurant sales and new restaurant growth drove continued market share gains during the quarter. That performance, in addition to our solid earnings growth, is a result of executing on our strategy. Our teams are building guest loyalty at all of our brands through their constant focus on our back-to-basics operating philosophy, which is grounded in food, service and atmosphere.

Excluding Tuesday’s move, Darden had outperformed the broad markets, with the stock up about 25% year to date. Over the past 52 weeks, the stock is up closer to 20%.

Shares of Darden were last seen up about 3.4% at $93.65, with a consensus analyst price target of $89.45 and a 52-week range of $71.02 to $95.22.

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