Darden (DRI) Gears up for Q2 Earnings: What's in the Offing?
Darden Restaurants, Inc. DRI is scheduled to report its second-quarter fiscal 2024 results on Dec 15, before the opening bell. In the last reported quarter, DRI delivered an earnings surprise of 4.3%.
Q2 Estimates
The Zacks Consensus Estimate for earnings is pegged at $1.71 per share, indicating growth of 12.5% year over year. The consensus estimate for revenues is pegged at $2.74 billion, suggesting an increase of 10.1% from the year-ago quarter.
Factors to Note
Darden is expected to have experienced robust results in the second quarter of fiscal 2024, thanks to advancements in its menu offerings, digital strategies and solid comparable sales. The notable growth in off-premise sales is anticipated to be a substantial driver of the company's overall revenue performance for the upcoming reporting quarter.
DRI’s fiscal second-quarter results are likely to reflect the robust performance of Olive Garden, Fine Dining and LongHorn Steakhouse. Our model predicts sales at Fine Dining, LongHorn Steakhouse and Other revenues to increase 103.9%, 3.6% and 7% year over year to $412 million, $622.2 million and $542.6 million, respectively.
However, high costs are likely to have hurt the margin in the quarter to be reported. The company remains cautious of price increases in beef, produce and wheat. For fiscal 2024, it expects total inflation of 3-4% and commodities inflation of 2.5%. Our model predicts total operating costs and expenses to rise 10.6% year over year to $2,492 million in the fiscal second quarter.
Darden Restaurants, Inc. Price and EPS Surprise
Darden Restaurants, Inc. price-eps-surprise | Darden Restaurants, Inc. Quote
What the Zacks Model Unveils
Our proven model doesn’t conclusively predict 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.
Darden has an Earnings ESP of 0.00% and a Zacks Rank #3 at present. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks Poised to Beat Earnings Estimates
Here are some stocks from the Zacks Retail-Wholesale sector that investors may consider as our model shows that these have the right combination of elements to post an earnings beat in the quarter to be reported.
Deckers Outdoor Corporation DECK has an Earnings ESP of +1.74% and a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of DECK have surged 83.4% in the past year. Deckers Outdoor’s earnings surpassed the consensus estimate in all the trailing four quarters, the average surprise being 26.3%.
Five Below, Inc. FIVE has an Earnings ESP of +0.20% and a Zacks Rank #3 at present.
Shares of Five Below have gained 9.9% in the past year. FIVE’s earnings surpassed the consensus estimate in all the trailing four quarters, the average surprise being 5.7%.
Dollar Tree, Inc. DLTR has an Earnings ESP of +0.25% and a Zacks Rank #3 at present.
Shares of Dollar Tree have declined 13.7% in the past year. DLTR’s earnings surpassed the consensus estimate in two of the trailing four quarters and missed twice, the average miss being 0.7%.
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Darden Restaurants, Inc. (DRI) : Free Stock Analysis Report
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Five Below, Inc. (FIVE) : Free Stock Analysis Report
