It was a tale of two earnings stories Tuesday morning, when both Darden Restaurants (DRI) - Get Report and General Mills (GIS) - Get Report reported fiscal 2017 second-quarter results. Darden reported in-line results, while General Mills missed on both earnings and revenue.
Darden, the Lakeland, Fla.-based owner of Olive Garden and Longhorn Steakhouse, reported earnings of 64 cents per share, matching analysts' expectations. Revenue came in at $1.64 billion, while analysts had projected $1.65 billion.
"It's been a very strong comeback for this stock, and if you believe that there will be a tax benefit in 2017, I think that bodes well for the casual dining space," Virtus Investment Partners Chief Market Strategist Joe Terranova said on CNBC's "Halftime Report" on Tuesday.
Terranova noted that while Longhorn's results were "weak," those are offset by the fact that Olive Garden continued to gain market share.
"We had another strong quarter with same-restaurant sales growth significantly outperforming the casual dining industry benchmarks, especially at Olive Garden," CEO Gene Lee said in a statement.
As for Minneapolis-based General Mills, the food company reported earnings of 85 cents per share, missing estimates by one cent. Revenue came in at $4.11 billion, missing expectations of $4.22 billion.
"This is kind of the poster child for the consumer staples sector of the market, which did so well in the first half of the year and has sputtered since," Lebenthal Asset Management CEO Jim Lebenthal noted.
Lebenthal theorized that what you see with General Mills may be attributed to a lack of growth opportunities.
"It still has a nice dividend yield, so it doesn't necessarily go down from here, but I don't see any growth catalyst to move it higher here," Lebenthal contended.