Fiscal 2Q18 performance
Darden Restaurants (DRI) posted its fiscal 2Q18 earnings on December 19. The company posted adjusted EPS (earnings per share) of $0.73 on revenues of $1.88 billion. Compared to fiscal 2Q17, the company’s revenue rose 14.6% while EPS rose 14.1%.
Analysts were expecting Darden to post adjusted EPS of $0.70 on revenues of $1.86 billion. Also, the company outperformed analysts’ SSSG (same-store sales growth) estimate of 1.4% by posting an SSSG of 3.1%. After posting strong fiscal 2Q17 earnings, the company’s management raised its revenue and EPS guidance for fiscal 2018. The strong fiscal 2Q18 earnings and raising of 2018 guidance appear to have increased investors’ confidence, leading to a rise in Darden’s stock price. As of December 20, Darden was trading at $95.67, which represents a rise of 5.7% since the announcement of fiscal 2Q18 earnings.
2017 has been a good year for Darden. The company’s stock price has risen 31.6% since the beginning of 2017. During the same period, its peers Texas Roadhouse (TXRH), Bloomin’ Brands (BLMN), and Brinker International (EAT) have returned 11.2%, 16.0%, and -21.1%, respectively.
In this series, we’ll look at Darden’s fiscal 2Q18 performance and compare it with analysts’ estimates. We’ll also cover management’s fiscal 2018 guidance and analysts’ estimates for the next four quarters. Finally, we’ll end this series by looking at the company’s valuation multiple and analysts’ recommendations.
Let’s start our analysis by looking at Darden’s fiscal 2Q18 revenue.