Darden (DRI) Q3 Earnings Top, View Withdrawn Due To Coronavirus
Zacks Investment Research | Mar 18, 2020 10:20PM ET
Darden Restaurants, Inc. (NYSE:DRI) reported third-quarter fiscal 2020 results, wherein both earnings and revenues surpassed the Zacks Consensus Estimate. The company reported better-than-expected earnings for the fifth straight quarter. Despite reporting robust results, the company’s shares are down 7% in pre-market trading session as it withdrew outlook and suspended dividends due to the coronavirus outbreak.
In the quarter under review, adjusted earnings came in at $1.90 per share, which outpaced the Zacks Consensus Estimate of $1.88. The bottom line also improved 5.6% year over year. Earnings were aided by the company’s relentless efforts to augment the basic operating factors of the business — food, service and ambiance.
Total sales of $2,346.5 million beat the consensus mark of $2,322 million. Moreover, sales improved 4.5% from the prior-year quarter driven by the addition of 40 net restaurants and an improvement of 2.3% in blended comps.
Sales by Segments
Darden reports business under four segments — Olive Garden, LongHorn Steakhouse, Fine Dining that includes The Capital Grille and Eddie V's, and Other Business.
Sales at Olive Garden increased 3.5% year over year to $1,169.3 million. Comps grew 2.1% at the segment, higher than the prior-quarter’s comp growth of 1.5%. Traffic increased 0.2%. Pricing improved 1.8% and menu-mix increased 0.1%.
Sales at Fine Dining improved 8% to $188.4 million. Comps at The Capital Grille climbed 4.2% compared with growth of 1.8% in second-quarter fiscal 2020. Further, Eddie V's reported comps growth of 3.9%, higher than 0.5% improvement in the prior quarter.
Sales at Other Business grew 4.3% year over year to $478.1 million. Moreover, comps at Seasons 52 rose 3% in the reported quarter against a comps decline of 3.5% in the prior quarter. Comps at Yard House inched up 1.8% compared with 0.7% increase in the previous quarter. However, comps slipped 0.5% at Bahama Breeze compared with a decline of 3.4% in the preceding quarter.
At LongHorn Steakhouse, sales advanced 5.7% to $510.7 million. Comps at the segment increased 3.9%, compared with comps growth of 2.6% in the year-ago quarter. Traffic improved 1.6%. Further, pricing and menu mix grew 1.9% and 0.4%, respectively.
In the reported quarter, comps at Cheddar's decreased 1.6% compared with a decline of 1.2% in the prior-year quarter.
Operating Highlights & Net Income
In the fiscal third quarter, total operating costs and expenses increased 4.4% year over year to $2,068.2 million. The rise can be attributed to an overall increase in food and beverage costs, restaurant expenses, and labor costs.
Darden Restaurants, Inc. Price, Consensus and EPS Surprise
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