This post was originally published on this site
https://i-invdn-com.investing.com/news/LYNXMPEA8B0WL_M.jpg
Darden Restaurants (NYSE:DRI) reported fiscal first-quarter earnings before the open Thursday, sending its stock price lower.
The company posted earnings per share of $1.56, in line with the analyst estimate of $1.56, with revenue coming in at $2.4 billion versus the consensus estimate of $2.47 billion.
The company said total sales increased 6.1%, primarily driven by a blended same-restaurant sales increase of 4.2% and sales from its 34 net new restaurants.
“We had a solid quarter and we saw more normal seasonality return to our business, which we did not experience last year,” said Darden President and CEO Rick Cardenas.
Looking ahead, the company sees FY2023 EPS between $7.40 and $8.00, versus the consensus of $7.70, with revenue between $10.2 billion and 10.4 billion, versus the consensus of $10.29 billion.
Following the earnings release, a Cowen analyst said the top-line miss was “driven entirely by Olive Garden (LTM 47% of sales) showing greater signs of seasonality vs calendar 2021.”
“We expect OG to be more of a fiscal 2H23 story. Meanwhile, sales at the remainder of the portfolio remain encouraging and DRI maintained all aspects of F2023 guidance. We expect margins to improve as inflation sequentially eases through F2023,” added the Cowen analyst, who has an Outperform rating and a $140 price target on the stock.
Elsewhere, a Truist analyst, who has a Buy rating and $136 price target on Darden, told investors in his note that “DRI reported F1Q23 EPS inline with consensus (missed our est. by $0.01) as SSS and restaurant margins missed, offset by lower than expected G&A.”
“Marketing spend increased slightly, but remains far below pre-COVID levels. The increase does raise concerns that DRI will respond to consumer pressures with increased marketing and promotions.”
Darden shares are down 3.5% at the time of writing.
