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Darden Restaurants: 2Q16 Earnings and Conference Call

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Darden surprises

Darden Restaurants (DRI) reported its 2Q16 earnings on December 18, with EPS (earnings per share) of $0.54, a 28% surprise in addition to analysts’ estimates of $0.42 per share. YTD (year-to-date) the company has returned 6.6%, compared with the First Trust Consumer Discretionary AlphaDEX ETF’s (FXD) return of 5.5%. To compare further, casual dining company Brinker International (EAT) has returned -22%, Texas Roadhouse (TXRH) has returned 1%, and Buffalo Wild Wings (BWLD) has returned -14.5% YTD.

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Optimism in future

Shares jumped 7% to $62.60 following the earnings announcement. This was a result of the company raising its forward guidance and outlook, which we’ll discuss throughout this series. The company saw its sales increase by 3.2% to $1.6 billion. Net income came in at $30 million, resulting in a positive net income margin of 2.7% during the quarter, compared with a loss of $30.8 million in the corresponding quarter a year ago.

Series overview

In this series, we’ll cover the most recent earnings of Darden Restaurants. We’ll discuss the earnings call and notes along with the company’s performance on key metrics during the quarter. We’ll also discuss the recent spin-off of the company’s real estate. We’ll discuss what management and analysts expect for 2016 and beyond in terms of the company’s earnings. Finally, we’ll look at the analysts’ targets and estimates for Darden’s share price.

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