DRI Earnings: Darden reports mixed fourth-quarter results

Darden Restaurants (NYSE: DRI) reported mixed results in its fiscal fourth quarter, with adjusted diluted net income of $2.65 per share, up 2.7% year over year, beating Street estimates of $2.61 per share. The company, which owns restaurant brands such as Olive Garden and LongHorn Steakhouse, generated total sales of $3 billion, up 6.8% year over year, beating the consensus estimate of $2.97 billion.

DRI’s fourth-quarter comparable sales remained flat

Overall, Darden’s same-store sales were flat in the quarter, impacted by weaker-than-expected results from Olive Garden. Olive Garden sales fell 1.5% in the fourth quarter, compared with analyst expectations for flat same-store sales.

Despite this, Olive Garden continued to be the largest share of Darden’s sales, accounting for more than 40% of the company’s total sales of $3 billion. Olive Garden reported sales of $1.27 billion in its fiscal fourth quarter.

DRI dividends and share buybacks

Darden’s board of directors has declared a quarterly cash dividend of $1.40 per share, payable on August 1 to shareholders of record at the close of business on July 10, 2024. This represents an increase of 6.9% over the third quarter of FY24.

During the fiscal fourth quarter, the company repurchased approximately 0.6 million shares of common stock for a total consideration of approximately $97.3 million. At the end of the fourth quarter, Darden had approximately $915 million remaining under its current $1 billion share repurchase authorization.

Darden’s FY25 Outlook

Darden forecasts total sales of $11.8 billion to $11.9 billion in FY25, with restaurant sales alone likely to grow 1% to 2%. The company expects diluted net income from continuing operations to be in the range of $9.40 to $9.60 per share.

Is DRI a good stock to buy?

Analysts remain bullish on DRI stock, with a Strong Buy consensus rating of 13 Buys and 4 Holds. DRI is down approximately 6% year to date, and DRI’s $175.76 average price target implies a 15.6% upside potential from current levels. These analyst ratings are likely to change following DRI’s fiscal fourth-quarter results today.