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Here's How Darden (DRI) Looks Just Ahead of Q2 Earnings

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Zacks Equity Research
·4 min read
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Darden Restaurants, Inc. DRI is scheduled to report second-quarter fiscal 2021 results on Dec 18, before the opening bell. In the last-reported quarter, the company delivered an earnings surprise of 1,020.00%.

How Are Estimates Placed?

The Zacks Consensus Estimate for the fiscal second-quarter bottom line is pegged at 71 cents per share, indicating a decline of 36.6% from earnings of $1.12 reported in the year-ago quarter. For revenues, the consensus mark stands at $1,696 million, suggesting a decrease of 17.3% from the year-ago figure.

Let's take a look at how things have shaped up in the quarter.

Darden Restaurants, Inc. Price and EPS Surprise

 

Darden Restaurants, Inc. Price and EPS Surprise
Darden Restaurants, Inc. Price and EPS Surprise

Darden Restaurants, Inc. price-eps-surprise | Darden Restaurants, Inc. Quote

Factors at Play

The coronavirus pandemic is likely to hurt the company’s results in the coming quarters. Due to the social-distancing protocol, traffic in second-quarter fiscal 2020 is likely to remain dismal. Notably, the company expects fiscal second-quarter sales at 82% of the prior-year period levels.

Meanwhile, the Zacks Consensus Estimate for sales at Olive Garden, Fine Dining, and LongHorn Steakhouse is pegged at $858 million, $118 million and $399 million, indicating a year-over-year decline of 16.2%, 23.9% and 10.7%, respectively. Moreover, the same for Other business stands at $322 million, suggesting a decrease of 25.3% from the prior-year quarter.

Nonetheless, increased focus on sales-building initiatives and technology-driven moves along with menu modifications and streamlining of order pickup process and payment methods are likely to have aided the top line in the to-be-reported quarter.

What Our Model Says

Our proven model does not 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. But that's not the case here.

Earnings ESP: Darden has an Earnings ESP of -4.64%. 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.

Peer Releases

Cracker Barrel Old Country Store, Inc. CBRL reported first-quarter fiscal 2021 results, wherein earnings and revenues beat the Zacks Consensus Estimate. The company reported adjusted earnings per share of 69 cents beat the Zacks Consensus Estimate of 42 cents by 64.3%. However, the bottom line declined 67.9% year over year. In the fiscal first quarter, revenues of $646.5 million beat the consensus mark of $639 million by 1.2%. However, the figure declined 13.7% on a year-over-year basis, primarily due to lower traffic owing to social-distancing protocols.

Dave & Buster's Entertainment, Inc. PLAY reported third-quarter fiscal 2020 results, wherein the bottom line surpassed the Zacks Consensus Estimate but the top line lagged the same. During the fiscal third quarter, the company posted a loss of $1.01 per share, narrower than the Zacks Consensus Estimate of a loss of $1.11. In the prior-year quarter, the company reported adjusted earnings per share of 2 cents. Meanwhile, quarterly revenues of $109.1 million missed the consensus mark of $113 million by 3.5%. The top line also slumped 63.6% from the year-ago quarter’s level.

Jack in the Box Inc. JACK reported solid fourth-quarter fiscal 2020 results, wherein earnings and revenues not only surpassed the Zacks Consensus Estimate but also increased on a year-over-year basis. The company’s adjusted earnings of $1.61 per share beat the Zacks Consensus Estimate of $1.14 by 41.2%. The metric also increased 69.5% year over year. Meanwhile, total revenues of $255.4 million outpaced the consensus mark of $249 million and grew 15.4% year over year.

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Jack In The Box Inc. (JACK) : Free Stock Analysis Report
 
Darden Restaurants, Inc. (DRI) : Free Stock Analysis Report
 
Cracker Barrel Old Country Store, Inc. (CBRL) : Free Stock Analysis Report
 
Dave & Busters Entertainment, Inc. (PLAY) : Free Stock Analysis Report
 
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