Darden Restaurants Q3 Earnings & Outlook Beat View, Will Acquire Cheddar's Scratch Kitchen
Darden Restaurants, Inc. (NYSE: DRI) posted better than expected fiscal third quarter earnings, offered an upbeat outlook, and announced that it would acquire Cheddar’s Scratch Kitchen for $780 million in cash.
Written by StockNews.com
The Orlando-based chain restaurant operator reported Q3 earnings per share of (EPS) of $1.32, which was $0.05 better than the Wall Street consensus estimate of $1.27.
Revenues rose 1.7% from last year to $1.88 billion, also topping analysts’ view for $1.87 billion.
Same restaurant sales (“comps”) increased 0.9% across all of the company’s brands, including:
- +1.4% gain at Olive Garden,
- +0.9% rise for The Capital Grille,
- -1.0% decline at Yard House,
- +0.2% gain for LongHorn Steakhouse;
- +4.7% rise at Eddie V’s,
- +0.8% gain for Seasons 52,
- and +0.5% gain for Bahama Breeze.
Comps are considered a key indicator of a restaurant chain’s health, since they measure the year-over-year performance of locations open at least 12 months.
Looking ahead, DRI’s full-year 2017 EPS guidance of $3.95 to $4.00 came in ahead of Wall Street expectations for $3.93.
Additionally, Darden said it would acquire Cheddar’s Scratch Kitchen for $780 million in cash. That deal should close within the next few months.
The company commented via press release:
“We continued to gain market share as we outperformed industry same-restaurant sales by a considerable margin again this quarter,” said CEO Gene Lee. “Our teams remain incredibly focused on driving strong operating fundamentals, and I’m very proud of the work they are doing to create memorable experiences for our guests.”
Darden Restaurants, Inc. shares rose $2.64 (+3.49%) in after-hours trading Monday. Year-to-date, DRI had gained 4.74% prior to today’s report, versus a 4.51% rise in the benchmark S&P 500 index during the same period.
DRI currently has a StockNews.com POWR Rating of A (Strong Buy), and is ranked #3 of 53 stocks in the Restaurants category.
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