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Darden's Q1 Earnings Coming Up: Will It Beat Estimates?
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Darden Restaurants, Inc. (DRI - Free Report) is scheduled to report first-quarter fiscal 2025 results on Sept. 19, before the opening bell. In the last reported quarter, the company delivered an earnings surprise of 1.15%.
How Are Estimates Placed?
The Zacks Consensus Estimate for the fiscal first-quarter earnings per share (EPS) is pegged at $1.82, indicating growth of 2.3% from $1.78 reported in the year-ago quarter.
For revenues, the consensus mark is pegged at $2.8 billion, suggesting a 2.5% increase from the year-ago quarter’s figure.
Darden’s fiscal first-quarter performance is likely to have benefited from new restaurant openings, the integration of Ruth's Chris Steak House and menu innovation. By focusing on core menu items and introducing new culinary options, the company has enhanced its appeal to a broad customer base. This focus, combined with more efficient kitchen operations, is likely to have contributed to higher guest satisfaction and sustained sales growth in the first quarter fiscal 2025.
In fiscal 2024, the company opened 53 new restaurants across various states and completed the integration of Ruth’s Chris Steak House ahead of schedule. The acquisition has already delivered accretive benefits, contributing 10 cents to EPS in the fourth quarter of fiscal 2024. With the fine dining brand's strong market position, the momentum is expected to continue into the first quarter of fiscal 2025, providing a boost to sales and profitability.
Strong contributions from core casual dining brands, including Olive Garden and LongHorn Steakhouse, are likely to have aided DRI’s top line in the fiscal first quarter. Our model predicts revenues from Olive Garden and LongHorn Steakhouse to rise 2.3% and 3.7% year over year to $1.3 billion and $0.7 billion, respectively.
However, the weakening consumer backdrop, particularly among households below the median income, is likely to have negatively impacted the company’s performance in the fiscal first quarter. Darden is likely to have faced softer demand. The company noted that it remains cautious with pricing to stay competitive, which could put pressure on its same-restaurant sales growth compared to prior quarters.
Elevated expenses concerning food, beverage and labor costs are likely to have dented margins in the to-be-reported quarter. Our model predicts fiscal first-quarter food and beverage, and labor costs to rise 3.5% and 3.9% year over year to $881 million and $909 million, respectively.
What Our Model Says
Our proven model predicts an earnings beat for Darden this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.
Earnings ESP: Darden has an Earnings ESP of +0.36%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Here are some other stocks worth considering from the Zacks Retail-Wholesale sector, as our model shows that these have the right combination of elements to beat on earnings this season:
Domino's Pizza, Inc. (DPZ - Free Report) currently has an Earnings ESP of +3.94% and a Zacks Rank #3.
Shares of Domino's have increased 6.4% in the past year. DPZ’s earnings beat the consensus mark in each of the last four quarters. The company has a trailing four-quarter earnings surprise of 11.2%, on average.
Papa John's International, Inc. (PZZA - Free Report) has an Earnings ESP of +2.11% and a Zacks Rank #3.
Shares of Papa John's have declined 32.9% in the past year. PZZA’s earnings beat the consensus mark in three of the trailing four quarters and missed on one occasion. The company has a trailing four-quarter earnings surprise of 13.6%, on average.
Starbucks Corporation (SBUX - Free Report) currently has an Earnings ESP of +2.61% and a Zacks Rank #3.
Shares of Starbucks have declined 0.5% in the past year. SBUX’s earnings beat the consensus mark in two of the trailing four quarters and missed twice. The company has a trailing four-quarter negative earnings surprise of 1.7%, on average.
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Darden's Q1 Earnings Coming Up: Will It Beat Estimates?
Darden Restaurants, Inc. (DRI - Free Report) is scheduled to report first-quarter fiscal 2025 results on Sept. 19, before the opening bell. In the last reported quarter, the company delivered an earnings surprise of 1.15%.
How Are Estimates Placed?
The Zacks Consensus Estimate for the fiscal first-quarter earnings per share (EPS) is pegged at $1.82, indicating growth of 2.3% from $1.78 reported in the year-ago quarter.
For revenues, the consensus mark is pegged at $2.8 billion, suggesting a 2.5% increase from the year-ago quarter’s figure.
Darden Restaurants, Inc. Price and EPS Surprise
Darden Restaurants, Inc. price-eps-surprise | Darden Restaurants, Inc. Quote
Factors at Play
Darden’s fiscal first-quarter performance is likely to have benefited from new restaurant openings, the integration of Ruth's Chris Steak House and menu innovation. By focusing on core menu items and introducing new culinary options, the company has enhanced its appeal to a broad customer base. This focus, combined with more efficient kitchen operations, is likely to have contributed to higher guest satisfaction and sustained sales growth in the first quarter fiscal 2025.
In fiscal 2024, the company opened 53 new restaurants across various states and completed the integration of Ruth’s Chris Steak House ahead of schedule. The acquisition has already delivered accretive benefits, contributing 10 cents to EPS in the fourth quarter of fiscal 2024. With the fine dining brand's strong market position, the momentum is expected to continue into the first quarter of fiscal 2025, providing a boost to sales and profitability.
Strong contributions from core casual dining brands, including Olive Garden and LongHorn Steakhouse, are likely to have aided DRI’s top line in the fiscal first quarter. Our model predicts revenues from Olive Garden and LongHorn Steakhouse to rise 2.3% and 3.7% year over year to $1.3 billion and $0.7 billion, respectively.
However, the weakening consumer backdrop, particularly among households below the median income, is likely to have negatively impacted the company’s performance in the fiscal first quarter. Darden is likely to have faced softer demand. The company noted that it remains cautious with pricing to stay competitive, which could put pressure on its same-restaurant sales growth compared to prior quarters.
Elevated expenses concerning food, beverage and labor costs are likely to have dented margins in the to-be-reported quarter. Our model predicts fiscal first-quarter food and beverage, and labor costs to rise 3.5% and 3.9% year over year to $881 million and $909 million, respectively.
What Our Model Says
Our proven model predicts an earnings beat for Darden this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.
Earnings ESP: Darden has an Earnings ESP of +0.36%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: The company has a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Other Stocks Poised to Beat on Earnings
Here are some other stocks worth considering from the Zacks Retail-Wholesale sector, as our model shows that these have the right combination of elements to beat on earnings this season:
Domino's Pizza, Inc. (DPZ - Free Report) currently has an Earnings ESP of +3.94% and a Zacks Rank #3.
Shares of Domino's have increased 6.4% in the past year. DPZ’s earnings beat the consensus mark in each of the last four quarters. The company has a trailing four-quarter earnings surprise of 11.2%, on average.
Papa John's International, Inc. (PZZA - Free Report) has an Earnings ESP of +2.11% and a Zacks Rank #3.
Shares of Papa John's have declined 32.9% in the past year. PZZA’s earnings beat the consensus mark in three of the trailing four quarters and missed on one occasion. The company has a trailing four-quarter earnings surprise of 13.6%, on average.
Starbucks Corporation (SBUX - Free Report) currently has an Earnings ESP of +2.61% and a Zacks Rank #3.
Shares of Starbucks have declined 0.5% in the past year. SBUX’s earnings beat the consensus mark in two of the trailing four quarters and missed twice. The company has a trailing four-quarter negative earnings surprise of 1.7%, on average.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.