This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Restaurant Stocks: Earnings to Watch

Darden Restaurants

Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player

Darden Restaurants (DRI) reported fiscal second quarter earnings on Dec. 20.

Revenue: $1.73 billion, compared with year-earlier sales of $1.64 billion.

Net Income: $74.5 million, compared with year-earlier profits of $60.3 million.

Net Earnings Per Share: 54 cents , compared with year-earlier EPS of 43 cents per share.

Analysis: JPMorgan had an overweight rating on the stock and $56 price target.

Darden Restaurants posted better-than-expected quarterly profits but downwardly revised its guidance for full-year same-store sales growth.

>>Darden Slides on Forecast

"The opportunity for sales upside and opportunity for other cost cuts to offset possible higher commodities in the second half of fiscal 2011 and in fiscal 2012 will be key to the stock's performance in 2011," noted JPMorgan Chase analysts.

Darden said it now expects comps to grow 2% this year, compared with its prior forecast for growth between 2% and 3%.

Darden grew overall comps by 1.4%, including growth of 2% at Olive Garden restaurants and 6.8% at Longhorn Steakhouse, offsetting a 1.6% decline at Red Lobster.

Darden maintained a 32-cent dividend to be paid next on Feb. 1 to shareholders of record on Jan. 10.

Darden also reaffirmed its guidance for fiscal 2011 EPS growth of 14% to 17%, or in a range of $3.26 to $3.35 per share. Analysts' consensus call was at the high end of that range, expecting full-year EPS of $3.35.

"The overall quarter was mixed as generally in-line sales were offset by better store margins," JPMorgan analysts noted, pointing out that performance at "Red Lobster continues to drag on the overall comp."

The analysts added that "we continue to believe the company, along with Texas Roadhouse (TXRH), has the unique ability to still cut costs vs. peers to offset commodity pressures."

3 of 22

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
BWLD $180.50 0.00%
CMG $637.50 0.00%
EAT $57.59 0.00%
MCD $98.74 0.00%
PNRA $184.36 0.00%

Markets

DOW 18,080.14 +21.45 0.12%
S&P 500 2,117.69 +4.76 0.23%
NASDAQ 5,092.0850 +36.0220 0.71%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs