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Darden Restaurants, Inc. (DRI - Free Report) has completed the acquisition of Ruth's Hospitality Group. Following the acquisition, Ruth's Chris Steak House brand is now added to Darden’s brand of portfolio, which include Olive Garden, LongHorn Steakhouse, Yard House, Cheddar's Scratch Kitchen, The Capital Grille, Seasons 52, Eddie V's and Bahama Breeze.
Ruth's Chris, having 155 locations around the world, has 81 company-owned or company-operated restaurants as well as 74 franchised restaurants.
Within the first year of this acquisition, Darden anticipates to generate pre-tax synergies in the $5-$10 million band. In the second year, pre-tax synergies are expected to be between $15 million and $20 million. The buyout is likely to be accretive to Darden's net earnings per share in fiscal 2024 by nearly 10 to 12 cents, excluding acquisition as well as integration-related expenses.
Acquisitions to Drive Growth
The acquisition will help drive the company’s top line. In April 2017, it acquired Cheddar's Scratch Kitchen (Cheddar's), a small restaurant chain, which has added an undisputed casual dining value to the company’s portfolio of differentiated brands. It also helped Darden to further enhance its scale.
Moreover, management made significant operational readjustment to the brand, which is expected to reap long-term benefits. Apart from making good progress with the integration of Cheddar’s, DRI seems to gain more confidence in its outcome.
Image Source: Zacks Investment Research
Price performance
Shares of the Zacks Rank #3 (Hold) company have gained 43.9% in the past year compared with the industry’s increase of 28.7%. Darden is benefiting from business-model enhancements and menu simplifications. Also, focus on technological enhancements in online ordering, introduction of To Go capacity management and Curbside I'm Here notification bode well.
Key Picks
Here we present some better-ranked stocks from the Zacks Retail and Wholesale sector.
The Zacks Consensus Estimate for MELI’s 2023 sales and EPS indicates rises of 27.6% and 75%, respectively, from the year-ago period’s levels.
Abercrombie & Fitch Co. (ANF - Free Report) flaunts a Zacks Rank #1. It has a trailing four-quarter earnings surprise of 480.6%, on average. Shares of ANF have increased 71.4% in the past year.
The Zacks Consensus Estimate for ANF’s 2023 sales and EPS indicates gains of 3.4% and 660%, respectively, from the year-ago period’s levels.
Chipotle Mexican Grill, Inc. (CMG - Free Report) sports a Zacks Rank #1. It has a trailing four-quarter earnings surprise of 4.7%, on average. Shares of CMG have increased 49% in the past year.
The Zacks Consensus Estimate for CMG’s 2023 sales and EPS indicates growth of 14% and 34%, respectively, from the year-ago period’s levels.
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Darden (DRI) Concludes Ruth's Hospitality Group's Acquisition
Darden Restaurants, Inc. (DRI - Free Report) has completed the acquisition of Ruth's Hospitality Group. Following the acquisition, Ruth's Chris Steak House brand is now added to Darden’s brand of portfolio, which include Olive Garden, LongHorn Steakhouse, Yard House, Cheddar's Scratch Kitchen, The Capital Grille, Seasons 52, Eddie V's and Bahama Breeze.
Ruth's Chris, having 155 locations around the world, has 81 company-owned or company-operated restaurants as well as 74 franchised restaurants.
Within the first year of this acquisition, Darden anticipates to generate pre-tax synergies in the $5-$10 million band. In the second year, pre-tax synergies are expected to be between $15 million and $20 million. The buyout is likely to be accretive to Darden's net earnings per share in fiscal 2024 by nearly 10 to 12 cents, excluding acquisition as well as integration-related expenses.
Acquisitions to Drive Growth
The acquisition will help drive the company’s top line. In April 2017, it acquired Cheddar's Scratch Kitchen (Cheddar's), a small restaurant chain, which has added an undisputed casual dining value to the company’s portfolio of differentiated brands. It also helped Darden to further enhance its scale.
Moreover, management made significant operational readjustment to the brand, which is expected to reap long-term benefits. Apart from making good progress with the integration of Cheddar’s, DRI seems to gain more confidence in its outcome.
Image Source: Zacks Investment Research
Price performance
Shares of the Zacks Rank #3 (Hold) company have gained 43.9% in the past year compared with the industry’s increase of 28.7%. Darden is benefiting from business-model enhancements and menu simplifications. Also, focus on technological enhancements in online ordering, introduction of To Go capacity management and Curbside I'm Here notification bode well.
Key Picks
Here we present some better-ranked stocks from the Zacks Retail and Wholesale sector.
MercadoLibre, Inc. (MELI - Free Report) sports a Zacks Rank #1 (Strong Buy). It has a trailing four-quarter earnings surprise of 35%, on average. Shares of MELI have gained 49.3% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for MELI’s 2023 sales and EPS indicates rises of 27.6% and 75%, respectively, from the year-ago period’s levels.
Abercrombie & Fitch Co. (ANF - Free Report) flaunts a Zacks Rank #1. It has a trailing four-quarter earnings surprise of 480.6%, on average. Shares of ANF have increased 71.4% in the past year.
The Zacks Consensus Estimate for ANF’s 2023 sales and EPS indicates gains of 3.4% and 660%, respectively, from the year-ago period’s levels.
Chipotle Mexican Grill, Inc. (CMG - Free Report) sports a Zacks Rank #1. It has a trailing four-quarter earnings surprise of 4.7%, on average. Shares of CMG have increased 49% in the past year.
The Zacks Consensus Estimate for CMG’s 2023 sales and EPS indicates growth of 14% and 34%, respectively, from the year-ago period’s levels.