Darden Restaurants, Inc. (DRI - Free Report) is one of the largest casual dining restaurant operators. Beginning fiscal fourth quarter 2015, the company began reporting its business in four segments: Olive Garden, LongHorn Steakhouse, Fine Dining, which includes The Capital Grille and Eddie V's, and Other Business. In April 2017, Darden completed the acquisition of small restaurant chain, Cheddar's Scratch Kitchen (Cheddar's), in an all-cash deal worth $780 million.

Most of Darden’s brands have been witnessing growth over the past few quarters on the back of sales initiatives like simplifying kitchen systems, better in-restaurant execution to enhance guest experience, menu innovation, remodeling along with various technology-driven moves. Also, the company’s efforts to check costs are commendable.

However, increased labor costs and a non-franchised business model may dent the company’s profits, while a soft consumer spending environment in the U.S. restaurant space might continue to restrict revenue growth.

Investors should note that the consensus estimate for DRI has not witnessed any significant movement over the last 60 days. Meanwhile, DRI’s earnings have been strong over the past few quarters. In fact, the company’s earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, with an average beat of 3.54%. Meanwhile, revenues posted positive surprises in two of the trailing four quarters.

Darden Restaurants, Inc. Price and EPS Surprise

Darden Restaurants, Inc. Price and EPS Surprise | Darden Restaurants, Inc. Quote

DRI currently has a Zacks Rank #3 (Hold) but that could change following Darden’s earnings report which was just released. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

We have highlighted some of the key stats from this just-revealed announcement below:

Earnings: DRI beats on earnings. Our consensus earnings estimate called for earnings per share of 98 cents, and the company reported adjusted earnings of 99 cents per share.

Revenues: DRI reported revenues of $1.94 billion, surpassing the Zacks consensus estimate of $1.93 billion.

Key Stats to Note: In first-quarter fiscal 2018, the company’s legacy brands posted blended comps growth of 1.7%.

Stock Price Impact: At the time of writing, the stock price of Darden was down 1.4% during pre-market trading hours following the earnings release.