Why LongHorn Steakhouse Owner Darden Restaurants Shares Taking A Hit Today
Portfolio Pulse from Shivani Kumaresan
Darden Restaurants Inc (NYSE:DRI) shares fell after reporting Q3 FY24 sales of $2.975 billion, missing estimates of $3.025 billion. Sales growth was attributed to the addition of 79 Ruth's Chris Steak House restaurants and 53 other new restaurants, despite a 1% decline in same-restaurant sales. Operating income rose 10.7% Y/Y to $387.4 million, with an operating margin of 13%. Adjusted EPS was $2.62, matching estimates. The company declared a quarterly dividend of $1.31 per share and authorized a new $1 billion share repurchase program. FY24 adjusted EPS outlook is $8.80-$8.90, with total sales expected to be $11.4 billion, below previous estimates.
March 21, 2024 | 12:54 pm
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Darden Restaurants Inc shares declined due to Q3 FY24 sales missing estimates, despite growth from new Ruth's Chris Steak House locations and other new restaurants. The company announced a quarterly dividend and a new $1 billion share repurchase program.
Darden Restaurants' shares are likely to face short-term pressure due to the missed sales estimates for Q3 FY24, despite the positive news of a new share repurchase program and a steady dividend. The market typically reacts negatively to missed sales targets, especially when they are a sign of slowing growth. However, the company's efforts to return value to shareholders through dividends and share repurchases may provide some support to the stock price.
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