Why Restaurant Operator Darden Shares Are Slipping Today
Portfolio Pulse from Shivani Kumaresan
Darden Restaurants Inc (NYSE:DRI) reported Q2 FY24 sales of $2.727 billion, a 9.7% increase Y/Y but slightly below analyst estimates of $2.741 billion. Blended same-restaurant sales rose by 2.8%, with additional revenue from 78 Ruth's Chris Steak House locations and 45 other new restaurants. Operating margin was 10.2%, with operating income up 19.4% Y/Y to $278.5 million. Adjusted EPS of $1.84 exceeded estimates of $1.74. The company declared a quarterly dividend of $1.31 per share and has $328 million left in its share repurchase program. FY24 adjusted EPS guidance is $8.75-$8.90, with revenue projected at $11.5 billion, slightly below the $11.57 billion estimate. DRI shares dropped 1.7% in premarket trading.
December 15, 2023 | 1:47 pm
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Darden Restaurants reported a slight miss in Q2 sales but beat EPS estimates. It declared a dividend and provided updated FY24 guidance, with shares falling 1.7% premarket.
The slight miss in sales despite a year-on-year growth and the downward adjustment in FY24 revenue guidance could contribute to a negative short-term sentiment among investors, leading to the premarket stock price decline. However, the beat on adjusted EPS and the declaration of a dividend may cushion the negative impact.
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RELEVANCE 100