Bloomin Brands Inc

McDonald’s (MCD) competition includes large international and national food chains as well as regional and local retailers of food products.

Deutsche Bank’s “buy” rating for Bloomin’ Brands (BLMN) appears to have increased investors’ confidence as Bloomin’ was trading in positive territory after the announcement.

Today, Deutsche Bank initiated coverage of Bloomin’ Brands (BLMN) with a “buy” rating and a 12-month price target of $24.

After Darden posted strong fiscal 2019 third-quarter earnings results and raised its guidance for fiscal 2019, analysts increased their price targets on its stock.

Darden’s management expects its revenue to rise 5.5%, with its overall SSSG for the year likely to be in the range of 2.5%–2.7%.

In the third quarter of fiscal 2019, Darden Restaurants (DRI) posted adjusted EPS of $1.80, outperforming analysts’ EPS expectation of $1.75.

Darden Restaurants’ (DRI) EBIT margin improved from 11.3% in the third quarter of fiscal 2018 to 11.8% in the third quarter of fiscal 2019.

In the third quarter of fiscal 2019, Darden Restaurants (DRI) posted SSSG (same-store sales growth) of 2.8%, beating analysts’ expectation of 2.2%.

In the third quarter of fiscal 2018, Darden Restaurants (DRI) posted revenue of $2.25 billion.

Darden Restaurants (DRI) posted its results for the third quarter of fiscal 2019 on March 21.

At 9:45 AM EST on March 21, Darden was trading at $114.56, which represents a rise of 5.5% from the previous day’s closing price.

During the second quarter of fiscal 2019, Darden Restaurants (DRI) posted an EBIT margin of 7.5%.

At the end of the second quarter of fiscal 2019, Darden Restaurants (DRI) operated 1,762 restaurants.

Darden Restaurants (DRI) posted system-wide SSSG (same-store sales growth) of 2.1% in the second quarter of fiscal 2019.

In the second quarter of fiscal 2019, Darden Restaurants (DRI) posted revenue of $1.97 billion, a rise of 4.9% year-over-year.

Darden Restaurants (DRI) posted its earnings for the second quarter of fiscal 2019 on December 18.

For the second quarter of fiscal 2019, analysts are expecting Darden Restaurants (DRI) to post adjusted EPS of $0.91, which represents a rise of 24.2% from $0.73 in the second quarter of fiscal 2018.

Despite BMO Capital’s downgrade on September 24, Darden Restaurants’ (DRI) stock price rose 0.4% and closed the day at $113.28.

On September 24, BMO Capital downgraded Darden from “market perform” to “underperform” due to concerns about food commodity deflation.

Since the announcement of Darden Restaurants’ earnings for the first quarter of fiscal 2019, Canaccord Genuity, Stifel, Jefferies, and Maxim have all raised their price targets.

Darden Restaurants has added 52 restaurants in the last four quarters, which represents 3.0% growth from 1,701 restaurants in the first quarter of fiscal 2018.

Since the beginning of 2018, Darden’s stock price has increased by 24.3%.

Analysts are expecting Darden Restaurants (DRI) to post adjusted EPS of $1.35, which represents an increase of 14.4% from $1.18 in the corresponding quarter of the previous year.

By the end of June 7, Darden Restaurants (DRI) was trading at $91.40, 0.5% higher than its closing price the day prior.

On June 7, SunTrust Robinson Humphrey upgraded Darden Restaurants (DRI) from “hold” to “buy” and raised its price target from $104 to $110.

As of March 22, Darden Restaurants (DRI) was trading at $85.94. On the same day, analysts were expecting the company’s stock price to reach $101.23 in the next 12 months.

Valuation multiples help investors compare companies with similar business models. Due to the high visibility in Darden Restaurants’ (DRI) future earnings, we’ve opted for the forward PE (price-to-earnings) multiple.

In fiscal 3Q!8, Darden Restaurants (DRI) posted adjusted EPS (earnings per share) of $1.71, which represents growth of 29.5% from $1.32 in fiscal 3Q17.

In fiscal 3Q18, Darden Restaurants (DRI) posted EBIT (earnings before interest and tax) of $240.1 million, which represents an EBIT margin of 11.3%.

In fiscal 3Q18, Darden Restaurants (DRI) posted systemwide SSSG (same-store sales growth) of 2.0%, compared to analysts’ expectation of 2.5%.

Sales from all eight of its brands constitute Darden Restaurants’ (DRI) revenue. In fiscal 3Q18, Olive Garden generated 50.4% of total revenue.

Darden Restaurants (DRI) posted its fiscal 3Q18 earnings before the market opened on March 22.

On January 8, 2018, Darden Restaurants (DRI) raised its EPS guidance for fiscal 2018 to $4.70–$4.78 from an earlier estimate of $4.45–$4.53.

As of the end of fiscal 2Q18, Darden Restaurants (DRI) operates 1,722 restaurants, which includes 849 Olive Garden, 496 LongHorn Steakhouse, 153 Cheddar’s Scratch Kitchen, 68 Yard House, 57 The Capital Grille, 39 Bahama Breeze, 41 Seasons 52, and 19 Eddie V’s brand restaurants.

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.

As of December 12, 2017, Darden Restaurants (DRI) was trading at $87.14.

Darden Restaurants (DRI) is scheduled to announce its fiscal 2Q18 earnings before the market opens on December 19, 2017.

In fiscal 1Q18, Darden Restaurants (DRI) posted EPS (earnings per share) of $0.95. However, removing one-time expenses, its adjusted EPS was $0.99.

In fiscal 1Q18, Darden Restaurants (DRI) posted EBIT (earnings before interest and tax) of $180.9 million, which represents an EBIT margin of 9.3% compared to 9.4% in fiscal 1Q17.

At the end of fiscal 1Q18, Darden Restaurants (DRI) operated 1,701 restaurants. The company operates 847 Olive Gardens, 491 LongHorn Steakhouses, and others.

Investors expect the devastation caused by Hurricane Harvey and Hurricane Irma in Texas and Florida to lower Darden’s sales in fiscal 1Q18.

In fiscal 1Q18, analysts expect Darden Restaurants (DRI) to post EPS of $0.99, which represents 12.5% growth from $0.88 in fiscal 1Q17.

Analysts expect Darden to post revenues of $1.93 billion in fiscal 1Q18, which represents 12.7% growth from $1.71 billion in 1Q17.

Darden Restaurants (DRI) will announce its fiscal 1Q18 earnings before the market opens on September 26, 2017.

In fiscal 4Q17, Darden posted adjusted EPS (earnings per share) of $1.18 on revenues of $1.9 billion.

On June 21, 2017, Darden was trading at a PE multiple of 20x, as compared to 17.8x before the announcement of its fiscal 3Q17 earnings.

In fiscal 3Q17, Darden Restaurants (DRI) reported an EBIT (earnings before interest and tax) margin of 12.2%, compared to 9.8% in fiscal 3Q16.

Darden Restaurants (DRI) announced its fiscal 3Q17 results on March 27, 2017. The company posted adjusted EPS (earnings per share) of $1.32 on revenue of $1.88 billion.

In fiscal 2Q17, Darden Restaurants (DRI) reported an EBIT margin of 7.1% compared to 7.0% in fiscal 2Q16. The margin was slightly lower than analysts’ estimate.

Darden Restaurants (DRI) announced its fiscal 2Q17 results on December 20, 2016. It reported EPS of $0.64 on overall revenue of $1.64 billion.

Darden Restaurants (DRI) is set to announce its fiscal 2Q17 earnings before the market opens on December 20, 2016. Since fiscal 1Q17, DRI stock has risen 23.5%.

At the end of fiscal 1Q17, Darden Restaurants (DRI) was operating 1,539 restaurants.

As of September 27, 2016, Darden Restaurants was trading at $61.5. This price may already have priced in the estimates we’ve discussed in this series.

Analysts expect Darden to pay dividends of $0.55 in fiscal 1Q17 at a payout ratio of 67.1%. For fiscal 2017, Darden is expected to pay dividends of $2.2.

Darden has beaten analysts’ earnings per share estimates in the last four quarters. Usually, when earnings beat analysts’ estimates, a share’s price rises.

Analysts are expecting Darden Restaurants (DRI) to post systemwide same-store sales growth of 1.6% in fiscal 1Q17 compared to 3.4% in fiscal 1Q16.

In the next four quarters, analysts are expecting Texas Roadhouse to post EPS of $1.90, which represents a growth of 15.2% from the same quarters in the previous year.

Currently, analysts are expecting Texas Roadhouse to post EPS of $0.37 and $0.38 in 3Q16 and 4Q16, respectively, which could add up to $1.78 for fiscal 2016.

By the end of 2Q16, Texas Roadhouse (TXRH) was operating 499 restaurants—415 company-owned restaurants and 84 franchised restaurants.

Texas Roadhouse (TXRH) reported its 2Q16 results on August 1 after the Market closed. TXRH posted revenue of $508.8 million and adjusted earnings per share of $0.47.

After fiscal 4Q16 results, Darden Restaurants’ (DRI) management has revised its same-store sales growth guidance for fiscal 2017 to the range of 1%–2% as compared to earlier estimates of 1%–3%.

In fiscal 4Q16, Darden Restaurants (DRI) reported an EBIT (earnings before interest and tax) margin of 10.3% compared with 10.1% in fiscal 4Q15.

On a comparable calendar basis, in fiscal 4Q16, Darden Restaurants (DRI) reported overall same-store sales growth of 2.6% against analysts’ estimate of 2.8%.

Having discussed Darden’s estimated revenue, sources of revenue, and estimated EBIT margins, let’s now discuss analysts’ and management’s guidance.

By the end of fiscal 3Q16, Darden Restaurants (DRI) operated 1,535 restaurants, including 844 Olive Gardens and 479 LongHorn Steakhouses.

Darden Restaurants (DRI) paid dividends of $0.55 per share in first two quarters of its fiscal 2016, and in fiscal 3Q16 it paid a dividend of $0.53.

As of June 19, 2016, casual dining restaurants were trading at a median PE multiple of 17.9x. That day, Texas Roadhouse (TXRH) was trading higher than our other four companies.

With EPS growth of 21.4%, The Cheesecake Factory (CAKE) beat our other four companies in 1Q16. EPS growth was driven mainly by share repurchases of more than $100 million.

In 1Q16, only one of the five casual dining restaurant companies in our series posted a rise in EBIT margins compared to 1Q15.

To have more control and implement their initiatives faster, casual dining restaurants are focused more on adding company-owned restaurants than franchised restaurants.

Revenue growth drives earnings and, in turn, raises investor confidence. In 1Q16, casual dining restaurant companies in our series posted a median revenue growth of 6.9%.

Casual dining restaurants didn’t have a good 1Q16. The five companies in our series posted a median same-store sales growth of -1.5% compared to 4.2% in 1Q15.

The rise in EPS estimates for the next four quarters has prompted analysts to increase their price target for TXRH for the next 12 months to $45.1 from their earlier estimate of $44.8.

Since the announcement of its 1Q16 results on May 2, 2016, the share price of Texas Roadhouse (TXRH) is up by almost 10%.

The Cheesecake Factory has positioned itself as an upscale casual dining concept that focuses on providing a distinctive, high-quality dining experience.

In 1Q16, Texas Roadhouse posted EPS of $0.5. This was lower than analysts’ estimate of $0.54. The adjusted EPS was above analysts’ estimate at $0.55.

The costs of sales, labor, operating expenses, and occupancy comprise the four main cost drivers of Buffalo Wild Wings (BWLD).

Buffalo Wild Wings is competing in the highly competitive restaurant business, wherein innovation is a must to keep up with the changing needs of customers.

From 2011 to 2015, the overall unit count of Buffalo Wild Wings (BWLD) has increased from 817 to 1,169. This represents a growth of 43%.

As of December 2015, franchisees operated 573 Buffalo Wild Wings (BWLD) restaurants, which accounts for 49% of BWLD’s total restaurant count.

From 2011 to 2015, Buffalo Wild Wings’ (BWLD) revenues increased from $784 million to $1.8 billion—a rise of over 131%.

Since its inception, Buffalo Wild Wings (BWLD) has become more and more attractive to college students, sports fans, and young people.

In 1991, Buffalo Wild Wings started franchising. Within three years, the company’s restaurant count was up to 35.

Buffalo Wild Wings is a casual dining restaurant and sports bar headquartered in Minneapolis. Founded in 1982, the company is also known as BW3.

During the first three quarters of fiscal 2016, Darden Restaurants (DRI) has paid dividends of $1.6 per share with $0.5 in 3Q16.

Darden Restaurants’ (DRI) revenue includes sales from all seven of its brands. The majority, or 55%, of revenues came from Olive Garden.

Buffalo Wild Wings (BWLD) had the highest unit growth in 4Q15 with the addition of 93 restaurants. That represents a unit growth of 8.6%.

It was a tough 4Q15 for casual dining restaurants, as the minimum wage for workers went up. In this series, we’ll look at what caused these stocks to underperform in 4Q15 and most of 1Q16.

Of the 29 analysts surveyed, 41.4% have “buy” recommendations for DRI, 51.7% have “hold” recommendations, and 6.9% have “sell” recommendations.

On March 9, 2016, Darden Restaurants (DRI) stated that it was expecting its SSSG to be approximately 4%.

The overall revenue of Darden Restaurants is expected to grow to $1.8 billion in fiscal 3Q16. This is compared to $1.7 billion in fiscal 3Q15, which represents growth of 5.9%.

Darden Restaurants is set to announce its fiscal 3Q16 earnings on April 5, 2016, before the market opens. Since its fiscal 2Q16 results on December 18, 2015, the company’s share price has appreciated by 5.2%.

Shake Shack recorded revenues of $51.1 million, with $49.3 million coming from company-owned restaurants sales and $1.7 million from licensed restaurants.

The price-to-sales ratios of Brinker, Darden, Buffalo Wild Wings, Bloomin’ Brands, and DineEquity are 0.95x, 1.19x, 2.15x, 0.53x, and 2.47x, respectively.

After its 1Q16 earnings report, Brinker fell by 7.6% to close at $47.67 per share as of October 20, 2015.

Is YUM headed for a spin-off? On October 15, YUM announced the appointment of activist investor Keith A. Meister to its board. Earlier this year, Meister suggested that YUM spin off its China business.

Cracker Barrel was outperformed by its peers based on the net profit margin and PE ratio. Based on the diluted EPS, Cracker Barrel outperformed its peers.

Cracker Barrel Old Country Store (CBRL) has a market cap of $3.49 billion. Its YTD performance was stable. It was in a trading range until the earnings report.

The ADP employment report tracks 23 million US employees across 400,000 businesses in the US. The report only takes into account private payrolls.

The current situation index reflects the actual health of the industry. Restaurants have advanced operations by adding sales and labor.