Darden Restaurants (DRI) Stock Climbs Today on Strong Earnings
NEW YORK (TheStreet) -- Darden Restaurants (DRI) - Get Report shares are up 4.24% to $67.62 in early market trading on Friday after the restaurant operator reported its third quarter earnings results before the opening bell today and issued guidance that topped analyst forecasts.
The owner and operator of the Olive Garden and LongHorn Steakhouse restaurants reported third quarter adjusted earnings of $133.8 million, or $1.05 per share, topping its year earlier mark of $109.7 million, or 82 cents per share, while beating analysts' 84 cents per diluted share expectations.
Revenue for the period also increased to $1.73 billion from $1.62 billion during the same quarter last year, but fell short of the $1.74 billion analysts were expecting. The company also reported that same store sales rose 3.6% in the period.
For the current quarter the company said that it expects to earn between 91 cents to 94 cents, topping analysts' consensus 89 cent per share estimates. For the year the company expects to earn between $2.45 to $2.48 per share, ahead of its own previous guidance of between $2.25 and $2.30 per share.
The Street's Jim Cramer, Portfolio Manager of Action Alerts PLUS Charitable Trust Portfolio, believes that while the quarterly results are impressive they are not unexpected and that there are better alternatives in the restaurant sector.
"As readers of Real Money Pro or viewers of Mad Money know from last week's game plan, I have been saying that Darden should have a terrific quarter because it is so levered to the price of gasoline. While I think it could go higher still I prefer Chipotle (CMG) - Get Report here because it now has very low expectations and because, frankly, I was hoping for an EVEN BETTER number from Darden's big Olive Garden division."
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Separately, TheStreet Ratings team rates DARDEN RESTAURANTS INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate DARDEN RESTAURANTS INC (DRI) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, disappointing return on equity and poor profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- You can view the full analysis from the report here: DRI Ratings Report
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