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Miami Herald
2 days ago
- Business
- Miami Herald
Analysts reboot Olive Garden parent's stock price targets as earnings loom
One night in December 1982, a tradition was born. The very first Olive Garden restaurant opened its doors on International Drive in Orlando, Fla., and the crowds just kept on coming. Don't miss the move: Subscribe to TheStreet's free daily newsletter In a bid to manage the throngs of customers, the restaurant offered free bread and salad, leading to the popularization of Olive Garden's unlimited breadsticks and salad. Today more than 900 Olive Garden restaurants operate in the U.S. The company is owned by Darden Restaurants (DRI) , which also owns several popular full-service restaurant chains, including, LongHorn Steakhouse and The Capital Grille. Bloomberg/Getty Images "Our ability to deliver profitable sales growth in this challenging environment is a testament to the strength of our business model," Chief Executive Rick Cardenas told analysts during the company's earnings call in March. The Olive Garden team, he said, "continues to use news to appeal to core guests as well as value seekers in this environment." "For the first time since before Covid, they are bringing back their signature buy-one-take-one limited-time offer," Cardenas said "With a price starting at $14.99, guests choose from seven entrees for their dining experience and then take a second entree home. This has historically been a high-traffic-driving promotion for Olive Garden." More Restaurants Beloved Mexican restaurant closing iconic location after 63 yearsMajor restaurant chain quietly closes several locationsIconic restaurant closing its doors after 32 years Total sales increased 6.2% to $3.2 billion in the quarter, driven by a blend of same-restaurant sales increase of 0.7% and sales from the acquisition of 103 Chuy's restaurants and 40 net new restaurants. The restaurant industry lately has been facing several challenges. A number of restaurants are closing as the sector contends with high costs, economic uncertainty and falling customer traffic. Consumers expect to spend 7% less each month on restaurants this summer than they did a year earlier, according to KPMG's Consumer Pulse Summer 2025 report. "Consumers aren't just belt-tightening - they're rethinking value altogether," Duleep Rodrigo, KPMG's consumer and retail sector leader, said in a statement. "It's not only about cutting back; it's about being intentional with every dollar spent," Rodrigo added. "In this environment trust, transparency and tangible impact matter more than ever. To win today's consumer, brands need empathy, innovation and a clear reason to matter." Related: Major restaurant chain quietly closes several locations Fast-food visits are up 26%, the firm said, while casual dining is down 38% - driven largely by cost-conscious households. Darden recently announced plans to close 15, or more than a third, of its Bahama Breeze restaurants and shutter two of its Seasons 52 casual restaurants. In addition, many people are eating at home, something Campbell's (CPB) CEO Mick Beekhuizen noted during the company's earnings call. "Consumers continue to cook at home and focus their spending on products that help them stretch their food budgets, and they're increasingly intentional about their discretionary snack purchases," Beekhuizen said. Another factor: Ozempic and similar GLP-1 drugs might be prompting restaurant customers to eat less, order less frequently and looking for healthier options. Shares of Darden Restaurants, which hit all-time high on June 16, have surged almost 20% this year and nearly 50% from a year ago. The company is scheduled to post fourth-quarter earnings on June 20 and investment houses have been issuing research reports. Jefferies analyst Andy Barish upgraded Darden to hold from underperform with a price target of $210, up from $165, according to The Fly. The firm has become "increasingly positive" on Darden's ability to return its core Olive Garden brand to "Every Day Affordable Price" leadership in casual dining and compete more effectively for traffic going forward.. Although Darden's valuation is "still rich," the improvements at Olive Garden merit an upgrade to hold, the analyst said. Yahoo Finance pegs the company's price-to-earnings multiples at 24.5 for the trailing 12 months and 20.3 for the forward 12 months. Stephens analyst Jim Salera raised the firm's price target on Darden to $200 from $178 and affirmed an equal-weight rating on the shares. The analyst said in a Q4 earnings preview that he continues to model fiscal 2025 same-store sales modestly below the company's guidance. But Salera said the impact of Darden's sales initiatives, including new menu items and increased marketing support, were apparent in the traffic data as Olive Garden and LongHorn both showed sequential improvement each month during the quarter. On June 16 UBS analyst Dennis Geiger raised the investment firm's price target on Darden to $245 from $225 and maintained a buy rating on the shares. Related: Fund-management veteran skips emotion in investment strategy The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Yahoo
22-05-2025
- Business
- Yahoo
Darden Restaurants to Host Fiscal 2025 Fourth Quarter Conference Call on June 20
ORLANDO, Fla., May 22, 2025 /PRNewswire/ -- Darden Restaurants, Inc., (NYSE: DRI) plans to release its fiscal 2025 fourth quarter financial results before the market opens on Friday, June 20, 2025, with a conference call to follow at 8:30 am ET. Rick Cardenas, CEO, and other senior management will discuss fourth quarter results and conduct a question and answer session. For those who cannot listen to the live broadcast, a replay will be available shortly after the call. What: Darden Restaurants, Inc. Fiscal 2025 Fourth Quarter Earnings Conference Call When: 8:30 am ET, Friday, June 20, 2025 Where: How: Live over the Internet – Simply log on to the web at the address above or, to access via telephone, please dial 877-407-9219 About DardenDarden is a restaurant company featuring a portfolio of differentiated brands that include Olive Garden, LongHorn Steakhouse, Yard House, Ruth's Chris Steak House, Cheddar's Scratch Kitchen, The Capital Grille, Chuy's, Seasons 52, Eddie V's, and Bahama Breeze. For more information, please visit Contacts: (Analysts) Courtney Aquilla (407) 245-5054(Media) Rich Jeffers (407) 245-4189 View original content: SOURCE Darden Restaurants, Inc.: Financial Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
22-03-2025
- Business
- Yahoo
Olive Garden parent company shrugs off concerns of plummeting consumer confidence because restaurant goers continue ‘to treat themselves and splurge'
Stock for Darden , which owns Olive Garden and Longhorn's Steakhouse, neared a 52-week high on Thursday. Investors were able to look past a lackluster quarter because the company said it wasn't affected by declines in consumer confidence. How does a restaurant conglomerate that relies on customers' discretionary income earn a minor stock rally during a period of declining consumer confidence? By showing Wall Street that while consumers might be worried, they're still hungry. Darden Restaurants, the parent company of popular chains like Olive Garden and LongHorn Steakhouse, saw its stock pop as much as 7% on Thursday after executives said during its third-quarter earnings call it had, so far, been impervious to mounting consumer fears. Any worries about an impending economic downturn weren't stopping customers from going out to eat. 'Even if people say they're feeling less optimistic, we haven't seen a huge correlation between that and dining out,' Darden CEO Rick Cardenas said during the earnings call. 'So changes in consumer sentiment haven't necessarily translated to material changes in consumer spending.' In fact, Cardenas said he expected eating out to be relatively resistant to any economic anxieties. 'Dining out is the number one category where people treat themselves and splurge,' he said. Investors were so pleased with Darden's prediction that consumers would keep spending at its restaurants that they overlooked a quarter that failed to meet Wall Street's growth expectations. Across all of its brands, Darden grew same store sales 0.7%, when investors expected them to grow 1.7%. Darden's revenue for the quarter was up 6.2% for a total of $3.2 billion. Most of that growth came on the back of its acquisition of Chuy's, an Austin-based Tex-mex chain. However, it was Darden's bright forecast that powered the stock on Thursday, which at one point throughout the day was just 15 cents from its 52-week high. The company said next quarter it expected same-store sales to grow 3%. Darden CFO Raj Veenam said the company didn't expect its operating margin to grow 'materially' alongside same-store sales. Darden declined to provide further comment to Fortune. Darden executives said they preferred to keep an eye on inflation levels rather than consumer confidence. For Darden, the priority was that incomes continued to outpace inflation, according to Cardenas. If the rate of inflation comes down and essential goods like groceries, gas, and housing cost less, then people would have more money for things like endless pasta and T-bone steaks. 'It's giving people a little bit more disposable income and they may be choosing to spend it on dining out versus buying a good,' Cardenas said. This story was originally featured on Sign in to access your portfolio
Yahoo
20-03-2025
- Business
- Yahoo
Darden Restaurants (NYSE:DRI) Announces US$1.40 Dividend and Expands Delivery with Uber
Darden Restaurants saw a share price increase of 4% over the past week, aligning with several company developments. The declaration of a quarterly dividend of $1.40 per share signals strong cash flow, which can be appealing to income-focused investors. The company's earnings announcement reported a rise in sales and net income compared to the previous year. However, revenues slightly underperformed expectations, yet same-restaurant sales reflected steady consumer spending according to CEO Rick Cardenas. Further expansion plans, including 50 to 55 new restaurant openings, and a pilot program with Uber for on-demand delivery also highlight growth prospects. These updates likely supported the stock's performance amid a broader market increase of 2%. The optimism around Darden's ability to maintain strong consumer engagement, despite some broader economic uncertainties, may have contributed to the favorable investor sentiment reflected in the stock's recent movement. Be aware that Darden Restaurants is showing 2 weaknesses in our investment analysis. Rare earth metals are the new gold rush. Find out which 19 stocks are leading the charge. Over the past five years, Darden Restaurants (NYSE:DRI) has delivered a total shareholder return of 256.87%, reflecting both share price appreciation and dividends. This impressive performance outpaces the recent annual return of the US Hospitality industry by a significant margin. The company's earnings have shown robust growth, averaging 26.6% per year over this period, which can be attributed partly to various strategic actions. For instance, Darden's ongoing expansion plans, including the opening of 50 to 55 new restaurants in fiscal year 2025, have likely played a role in attracting long-term investor interest. Moreover, Darden's strategic partnership with Uber for on-demand delivery services through Cheddar's Scratch Kitchen could further enhance consumer accessibility and engagement. Despite revenue growth forecasts being somewhat subdued compared to broader market expectations, Darden's sound financial health is evidenced by trading below its estimated fair value and having a strong Return on Equity, albeit skewed by high debt levels. These elements collectively underscore the company's ability to drive shareholder value over the extended period. Click to explore a detailed breakdown of our findings in Darden Restaurants' financial health report. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include NYSE:DRI. Have feedback on this article? Concerned about the content? with us directly. Alternatively, email editorial-team@ Sign in to access your portfolio
Yahoo
20-03-2025
- Business
- Yahoo
Darden (NYSE:DRI) Misses Q1 Revenue Estimates
Restaurant company Darden (NYSE:DRI) fell short of the market's revenue expectations in Q1 CY2025, but sales rose 6.2% year on year to $3.16 billion. On the other hand, the company's outlook for the full year was close to analysts' estimates with revenue guided to $12.1 billion at the midpoint. Its non-GAAP profit of $2.80 per share was in line with analysts' consensus estimates. Is now the time to buy Darden? Find out in our full research report. Revenue: $3.16 billion vs analyst estimates of $3.21 billion (6.2% year-on-year growth, 1.7% miss) Adjusted EPS: $2.80 vs analyst expectations of $2.79 (in line) Adjusted EBITDA: $565.7 million vs analyst estimates of $558.2 million (17.9% margin, 1.3% beat) The company reconfirmed its revenue guidance for the full year of $12.1 billion at the midpoint Management reiterated its full-year Adjusted EPS guidance of $9.49 at the midpoint Operating Margin: 13.2%, in line with the same quarter last year Free Cash Flow Margin: 13.5%, down from 14.7% in the same quarter last year Locations: 2,165 at quarter end, up from 2,022 in the same quarter last year Same-Store Sales were flat year on year (-1% in the same quarter last year) Market Capitalization: $22.04 billion "We had a solid quarter, and I am proud of how our teams managed their business and controlled what they could control," said Darden President & CEO Rick Cardenas. Founded in 1968 as Red Lobster, Darden (NYSE:DRI) is a leading American restaurant company that owns and operates a portfolio of popular restaurant brands. Sit-down restaurants offer a complete dining experience with table service. These establishments span various cuisines and are renowned for their warm hospitality and welcoming ambiance, making them perfect for family gatherings, special occasions, or simply unwinding. Their extensive menus range from appetizers to indulgent desserts and wines and cocktails. This space is extremely fragmented and competition includes everything from publicly-traded companies owning multiple chains to single-location mom-and-pop restaurants. A company's long-term sales performance is one signal of its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. With $11.76 billion in revenue over the past 12 months, Darden is one of the most widely recognized restaurant chains and benefits from customer loyalty, a luxury many don't have. Its scale also gives it negotiating leverage with suppliers, enabling it to source its ingredients at a lower cost. However, its scale is a double-edged sword because there is only so much real estate to build restaurants, placing a ceiling on its growth. To accelerate system-wide sales, Darden likely needs to optimize its pricing or lean into new chains and international expansion. As you can see below, Darden's sales grew at a tepid 5.7% compounded annual growth rate over the last six years (we compare to 2019 to normalize for COVID-19 impacts) as it barely increased sales at existing, established dining locations. This quarter, Darden's revenue grew by 6.2% year on year to $3.16 billion, missing Wall Street's estimates. Looking ahead, sell-side analysts expect revenue to grow 8.2% over the next 12 months, an acceleration versus the last six years. This projection is above the sector average and implies its newer menu offerings will catalyze better top-line performance. Today's young investors likely haven't read the timeless lessons in Gorilla Game: Picking Winners In High Technology because it was written more than 20 years ago when Microsoft and Apple were first establishing their supremacy. But if we apply the same principles, then enterprise software stocks leveraging their own generative AI capabilities may well be the Gorillas of the future. So, in that spirit, we are excited to present our Special Free Report on a profitable, fast-growing enterprise software stock that is already riding the automation wave and looking to catch the generative AI next. A restaurant chain's total number of dining locations often determines how much revenue it can generate. Darden operated 2,165 locations in the latest quarter. It has opened new restaurants at a rapid clip over the last two years, averaging 5.6% annual growth, much faster than the broader restaurant sector. When a chain opens new restaurants, it usually means it's investing for growth because there's healthy demand for its meals and there are markets where its concepts have few or no locations. A company's restaurant base only paints one part of the picture. When demand is high, it makes sense to open more. But when demand is low, it's prudent to close some locations and use the money in other ways. Same-store sales provides a deeper understanding of this issue because it measures organic growth at restaurants open for at least a year. Darden's demand within its existing dining locations has been relatively stable over the last two years but was below most restaurant chains. On average, the company's same-store sales have grown by 1.6% per year. This performance suggests it should consider improving its foot traffic and efficiency before expanding its restaurant base. In the latest quarter, Darden's year on year same-store sales were flat. This was a meaningful deceleration from its historical levels. We'll be watching closely to see if Darden can reaccelerate growth. It was good to see Darden narrowly top analysts' EBITDA expectations this quarter. On the other hand, its revenue missed and its same-store sales fell slightly short of Wall Street's estimates. Overall, this quarter could have been better. The stock traded down 1.7% to $185 immediately following the results. Darden didn't show it's best hand this quarter, but does that create an opportunity to buy the stock right now? If you're making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here, it's free. 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