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Darden Restaurants Posts Solid Quarterly Results, Bumps Up Dividend; Shares Pop 3%

Restaurant operator Darden Restaurants (DRI) posted strong fiscal Q4 results as both revenues and earnings outpaced analysts’ expectations and increased year-over-year. The company also increased its quarterly cash dividend.

Following the earnings results, the share price jumped 3.3% to close at $139.85 on June 24.

Darden reported total sales of $2.28 billion, which grew 79.5% from the year-ago period and beat revenue expectations of $2.12 billion.

Consolidated same-restaurant sales grew 90.4% year-over-year.

Adjusted earnings came in at $2.03 per share, beating consensus estimates of $1.68 per share. A loss of $1.24 per share was reported in the same quarter last year.

Darden CEO Gene Lee said, “Given the business transformation work we have done, and the demand we are seeing from the consumer, we are well positioned to thrive in this operating environment.” (See Darden stock chart on TipRanks)

Furthermore, the company announced a quarterly cash dividend of $1.10 per share, reflecting an increase of 25% from the prior quarter, payable on August 2 to shareholders of record on July 9. Additionally, it repurchased shares worth $38 million in the fiscal fourth quarter.

For Fiscal 2022, the company expects revenues to come in the range of $9.2 – $9.5 billion. The consensus estimate sits at $9.22 billion. Non-GAAP net earnings per share are expected in the $7.00 – $7.50 band, versus consensus estimates of $7.21 per share.

Following the fiscal Q4 earnings release, Truist Financial analyst Jake Bartlett reiterated a Buy rating on the stock but decreased the price target to $167.00 from $170.00. This implies 19.4% upside potential to current levels.

Consensus among analysts is a Strong Buy based on 17 Buys and 5 Holds. The average DRI analyst price target of $160.50 implies 14.8% upside potential from the current levels. Shares have gained 87.5% over the past year.

TipRanks data shows that financial blogger opinions are 94% Bullish on DRI, compared to a sector average of 70%.

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