Categories AlphaGraphs, Earnings, Retail

Darden stock jumps on upbeat quarterly results

Darden Restaurants (DRI) reported a 41% jump in profit for the fourth quarter helped by higher sales and an increase in same-restaurant sales from its legacy brands. Despite sales coming in line with consensus, the owner of Olive Garden and other chain restaurants’ earnings exceed market expectations and it guided fiscal 2019 EPS above Street’s view. Following this, the stock climbed 12% in the pre-market trading.

With sales increasing by 10.3% to $2.1 billion, the Orlando, Florida-based company’s earnings jumped by 41% to $174.5 million or $1.39 per share. Adjusted EPS from continuing operations grew 17.8% to $1.39. Blended same-restaurant sales from Darden’s legacy brands increased 2.2%.

Sales benefited from better pricing and different menu-mix. The increase was offset by a decline in same-restaurant traffic due to severe winter weather that negatively impacted same-restaurant sales by 30 basis points.

Looking ahead into fiscal 2019, the company expects sales growth of 4-5% and EPS from continuing operations of $5.40-$5.56. Same-restaurant sales are expected to rise by 1-2% and the company predicts to open 45 to 50 restaurants during the full year. Total capital spending is anticipated to be $425-475 million for the year.

Darden Restaurants fourth quarter 2018 earnings
Darden Restaurants Q4 2018 Earnings Infographic

During the fourth quarter, the company witnessed a rise in food and beverage expenses, restaurant labor costs, restaurant expenses, marketing expenses and depreciation and amortization. But it curbed general and administrative expenses that fell by 22.9%. Helped by an increase in sales, Darden was able to manage the 8% increase in operating costs and expenses to a large extent.

For over the past three years, the restaurant operator has returned more than $1.5 billion to its shareholders and during fiscal 2018 it repaid $550 million in the form of dividends and share buybacks. In addition, the board authorized a new share repurchase program of up to $500 million. Darden bought back about 0.3 million shares for about $27 million in the final quarter of 2018.

On June 20, the board lifted quarterly dividend by 19% to $0.75 per common share, payable on August 1, 2018, to shareholders of record on July 10, 2018.

Darden’s shares ended Wednesday’s regular trading session down 1.42% at $93.27 on the NYSE. The stock had been trading between $76.27 and $100.11 for the past 52 weeks.

Most Popular

Important takeaways from Paychex’s (PAYX) Q2 2025 earnings report

Paychex Inc. (NASDAQ: PAYX), a leading provider of human resources and payroll services, reported better-than-expected revenue and profit for the second quarter of fiscal 2025, sending the stock higher soon

Lamb Weston’s (LW) challenges may not end soon, a few points to note

Shares of Lamb Weston Holdings, Inc. (NYSE: LW) turned red in mid-day trade on Friday. The stock has dropped 19% in the past one month. The company delivered disappointing results

CCL Earnings: Carnival Corp. Q4 2024 revenue rises 10%

Carnival Corporation & plc. (NYSE: CCL) Friday reported strong revenue growth for the fourth quarter of 2024. The cruise line operator reported a profit for Q4, compared to a loss

Tags

Add Comment
Loading...
Cancel
Viewing Highlight
Loading...
Highlight
Close
Top