Darden Bags a Profit, Raises its Outlook

23 Dec 2015 | Author: | No comments yet »

Darden Restaurants (DRI) Beats on Earnings, Lags on Sales December 18, 2015.

Darden Restaurants, Inc. (NYSE:DRI) stock trades in the green in pre-market trading hours, as the company disclosed better-than-expected second-quarter fiscal 2016 (2QFY16) results in the morning.Darden Restaurants (NYSE: DRI) closed down 1.52% ahead of earnings yesterday but Darden look poised for a rebound after Darden Restaurants (NYSE: DRI) reported Q2 EPS of $0.54, $0.12 better than the analyst estimate of $0.42.

The restaurant operator reported $0.54 earnings per share (EPS) for the quarter, beating the Thomson Reuters’ consensus estimate of $0.41 by $0.13, ARN reports. The company has performed well in fiscal 2015 as comps at all its restaurant chains gained momentum, after a somewhat disappointing performance in fiscal 2014.

Darden Restaurants Inc.’s stock surged 2.8% in premarket trade Friday, The Orlando, Florida-based company said it had net income of 33 cents per share. It seems that the efforts to grow and develop the LongHorn Steakhouse by focusing on its core menu, marketing strategy, customer relationship management, digital advertising and a strong promotional pipeline have been yielding positive results. Using comparable calendar periods balances the one-week shift and provides a clearer year-over-year comparison. “We saw continued momentum this quarter, with all our brands once again posting positive same-restaurant sales growth and delivering meaningful margin improvement,” said CEO Gene Lee. “These results reflect our continuous focus on operating great restaurants and leveraging our competitive advantages to drive sales and profitability.” Segment profit represents sales, less costs for food and beverage, restaurant labor, restaurant expenses and marketing expenses. Segment profit for fiscal 2016 includes the impact of additional rent expense related to the completion of our real estate strategy, primarily impacting Olive Garden and LongHorn. The Company successfully concluded the spin-off of Four Corners Property Trust (FCPT) that included 424 restaurant properties, resulting in a stock dividend valued at $6.79 per share (Darden equivalent) as of the November 10, 2015 market close, the first day of regular-way trading in FCPT stock.

Darden’s Board of Directors authorized a new share repurchase program under which the Company may repurchase up to $500 million of its outstanding common stock. No expiration date for this program has been announced, and it is worth approximately 6.7% of the company’s outstanding shares, based on the yesterday’s closing price. Maxim Group cut their price target on Darden Restaurants from $72.00 to $71.00 and set a “buy” rating on the stock in a report on Wednesday, November 11th. During Delta Airlines Inc. (NYSE:DAL) Investor Day, Chief Executive Richard Anderson announced that the company intends to acquire a second-hand Boeing 777 for $7.7 million. As of July 8, 2015, it owned and operated approximately 1,500 restaurants under the Olive Garden, LongHorn Steakhouse, Bahama Breeze, Seasons 52, The Capital Grille, Eddie V’s, and Yard House brand names.

We successfully spun-off an exciting and valuable new business in FCPT while improving our credit profile and strengthening the outlook on our credit ratings. Unit prices for newer models of the 777 remain healthy however it is the older 777-200ER model with Rolls-Royce engines that has seen the greatest drop in prices. Our value-creating business model has us well positioned to generate significant durable cash flow to fund growth and return capital to shareholders.” The Company will host a conference call and slide presentation on Friday, December 18 at 8:30 am ET to review its recent financial performance. Click to get this free report >> Zacks Restaurant Recommendations: In addition to dining at these special places, you can feast on their stock shares.

To listen to the call live, please go to https://www.webcaster4.com/Webcast/Page/1007/11918 at least fifteen minutes early to register, download, and install any necessary audio software. The number of 777-200ER’s in storage is also on the rise with 34 aircraft reported for November; which is an increase of six times over the previous year. In addition, at the conclusion of the call, we will post a supplemental presentation on the Investors section of our website at: http://www.darden..com that provides more context on our second quarter fiscal 2016 results. Through subsidiaries, the Company owns and operates all of its restaurants in the United States and Canada, except for three restaurants located in Florida and three restaurants in California, which are owned jointly by the Company and third parties, and managed by the Company, seven franchised restaurants in Puerto Rico and one Atlanta, Georgia airport location.

If you are reading this article on another website, that means this article was illegally copied and re-published to this website in violation of U.S. and International copyright law. Forward-looking statements in this communication regarding our expected earnings performance and all other statements that are not historical facts, including without limitation statements concerning our future economic performance, are made under the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. While lessors and airlines may assign book values to the aircraft, if the aircraft is not sold or leased, it has no value because it just cannot be handed over to anyone.

By their nature, forward-looking statements involve risks and uncertainties that could cause actual results to materially differ from those anticipated in the statements. The 787 has suffered delays in production however, Boeing has finally gotten the kinks out and airlines will start to end their 777 leases as they receive their 787’s. The information in this press release includes financial information determined by methods other than in accordance with U.S. generally accepted accounting principles (“GAAP”), such as adjusted earnings per diluted share from continuing operations.

According to the International Bureau of Aviation (IBA), more than a 160 wide-body planes are coming off leases in the next four years, with most of them being Boeing aircraft.

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