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Why Darden Restaurants Q3 Earnings Were Not Enough
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Darden Restaurants Inc. (NYSE: DRI) reported its fiscal third-quarter financial results before the markets opened on Thursday. The company said that it had $1.71 in earnings per share (EPS) on $2.13 billion in revenue, which compares with consensus estimates from Thomson Reuters of $1.64 in EPS on revenue of $2.14 billion. The same period of last year reportedly had EPS of $1.32 and $1.88 billion in revenue.
During the quarter, total sales increased 13.3%, including 11.3% growth from the addition of 154 Cheddar’s Scratch Kitchen restaurants and 34 other net new restaurants. In the same time, blended same-restaurant sales from Darden’s legacy brands increased 2.0%.
In terms of the outlook for the fiscal 2018 full year, the company expects to see EPS in the range of $4.75 to $4.80, with total sales increasing approximately 13% and same-restaurant sales up about 2%. The consensus estimates call for $4.76 in EPS on $8.09 billion in revenue for the year.
Darden’s board of directors declared a regular quarterly cash dividend of $0.63 per share on outstanding common stock. The dividend is payable on May 1 to shareholders of record at the close of business on April 10.
On the books, Darden’s cash and cash equivalents totaled $146.8 million at the end of the quarter, down from $233.1 million at the end of the previous fiscal year.
Gene Lee, CEO of Darden, commented:
Our solid performance this quarter is a result of our focus on executing our back-to-basics operating philosophy to deliver memorable guest experiences. Our strategy continues to work, creating an environment that allowed us to invest in our people and our business, strengthen our balance sheet and return nearly $100 million to shareholders during the quarter.
Shares of Darden closed Wednesday at $93.31, with a consensus analyst price target of $103.32 and a 52-week range of $75.20 to $100.11. Following the announcement, the stock was down 4% at $89.61 in early trading indications Thursday.
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