Darden's (DRI) Q4 Earnings & Revenues Surpass Estimates

Darden Restaurants, Inc. (DRI - Free Report) reported better-than-expected results in the fourth quarter of fiscal 2018. Adjusted earnings of $1.39 per share beat the consensus estimate of $1.35 by 3%. Earnings increased 17.8% year over year on the back of higher revenues. Notably, the quarter marked the 15th consecutive earnings beat for the company. Darden’s impressive earnings also resulted from the company’s relentless efforts in improving the basic operating factors of the business — food, service and atmosphere.

Total revenues of $2.13 billion marginally outpaced the consensus mark of $2.12 billion. Revenues also increased by 10.3% from the prior-year quarter. The upside was driven by sales growth across every brand.

Darden’s shares have gained 5.7% in the past year, outperforming its industry’s growth of 2.2%.


Revenues by Segments

Darden reports business under four segments: Olive Garden, LongHorn Steakhouse, Fine Dining that includes The Capital Grille and Eddie V's, and Other Business.

In the reported quarter, the company’s legacy brands posted blended comps growth of 2.2%. In the previous quarter, comps had increased 2%.

Sales at Olive Garden were up 4% year over year to $1.06 billion. Comps grew 2.4% at the segment, slightly higher than the prior-quarter’s comps growth of 2.2%. Traffic rose 0.1%, along with 1.7% improvement in pricing and 0.6% growth in menu mix.

Sales at Fine Dining increased 5.9% to $147.3 million. Comps at The Capital Grille rose 2.8%, flat with third-quarter comps growth. Eddie V's also posted comps growth of 4.1%, higher than 2.7% improvement recorded in the last reported quarter.

Revenues from Other Business jumped 38.9% year over year to $460.7 million. However, comps at Seasons 52 fell 0.6% in the quarter compared with the third-quarter comps decline of 0.2%. Comps at Yard House inched up 1.1% compared with 1.9% increase in the last reported quarter. Meanwhile, comps grew 1.1% at Bahama Breeze, higher than comps growth of 0.2% in the preceding quarter.

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