DRI is still bullish about its revenue, saying it will increase by 6% to 7% going forward. Based on the prior year's revenue of $8 billion, this translates to somewhere between $8.48 billion to $8.56 billion in 2013. The analyst community expects revenue of $8.52 billion.
One of DRI's biggest operating expenses is the price of food ingredients used in its many restaurants. On this topic, CFO C. Bradford Richmond said at the earnings conference call, "Turning to our commodities basket, we have approximately 90% of our total food spend contracted through the end of this fiscal year. Food inflation in the third quarter was approximately 0.4%, with seafood deflation in the mid-single digits and beef inflation in the low double digits."
This certainly indicates that DRI has worked hard to anticipate any spikes in commodity inflation and to keep a lid on its other operating expenses. This bodes well for the company's stated intention to increase its dividend payout and help goose its share price higher.
P.S. This just came across my screen for those of us who like another cash-rich company: Apple (AAPL). "Turns out, we spoke too soon. For the ninth time in a row, iPhone ranks 'Highest in Customer Satisfaction with Consumer Smartphones' by J.D. Power and Associates. iPhone ranked highest in a study that looked at the following categories: performance, physical design, features, and ease of operation. In fact, iPhone has ranked highest in each of these studies since the first iPhone was introduced." If you own an iPhone and agree, I'll see you at the Olive Garden where I'll celebrate.As of the time of publication the author was long AAPL. Follow @m8a2r1 This article was written by an independent contributor, separate from TheStreet's regular news coverage. Most large cap stocks were once small and mid-cap stocks. Bryan Ashenberg is here to help you find the cream of the crop amongst the market chaos.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV