Darden Restaurants Inc
Darden analysis: Assessing the success of a Darden brand spinoff
Darden Restaurants Inc. (DRI) has jumped since the Wall Street Journal mentioned that Barington Capital Group took a 2.8% stake, calling on Darden to split in two.
Strength in Initial Jobless Claims Is Positive for Restaurants
Initial jobless claims can help us gauge the health of the US labor market. It indicates the number of people filing for unemployment.
Syria strike would raise gas prices and reduce restaurants’ sales
Why higher gasoline prices can reduce people’s leftover spending at restaurants, which will negatively affect restaurant sales.
Should Investors Worry about Panera’s High Valuation?
In this part, we’ll look at how the company’s valuation PE (price-to-earnings multiple) affects Panera’s stock price.
Bloomin’ Brands Has 3 Key Costs of Operation
Bloomin’ Brands’ revenue was affected by as much as 0.7% due to price increases for beef and seafood. A restaurant can do little when facing rising prices
Restaurant Capex Outlook Remains Elevated in May
The expected capital expenditure index increased by 0.9% to 100.8 in May from 101.7 in April.
Darden analysis: Key benefits of a restaurant owning properties
Owning properties reduces real estate costs A restaurant business that owns its own building is a bit different from a restaurant business that rents its buildings or lands. From a business standpoint, you can think of a restaurant that owns its buildings as the sum of two businesses: restaurant and real estate. Because the real […]
Why Yum! Brands Is Expected To Report Lower EBITDA
Wall Street analysts’ estimated EBITDA for the fourth quarter is $633 million—compared to $918 million in the same quarter last year.
Why poor comps affected McDonald’s revenues
With disappointing same-store sales performance across all four segments, it isn’t surprising that McDonald’s reported revenues of $6,987 million—a 4.5% decline.
Shake Shack Management’s Guidance for 2015: Key Takeaways
During the latest earnings call, Shake Shack’s (SHAK) management offered revenue guidance in the range of $159 million to $163 million in 2015.
Cracker Barrel’s Revenue and Income Rose in 1Q16
Cracker Barrel has a market cap of $3.1 billion. After the 1Q16 earnings report, Cracker Barrel fell by 6.5% to close at $129.91 per share as of November 24, 2015.
An In-Depth Overview of Panera Bread
Panera Bread is a limited-service fast-casual restaurant company. In July 2017, JAB acquired Panera in a $7.5 billion deal and took it private.
How technology helps drive restaurant sales
Increasingly, restaurants are using technology to increase customer traffic and drive same-store sales.
How Food Inflation Impacts The Restaurant Industry
Food inflation can squeeze a restaurant’s operating margins, but a restaurant can adjust the menu pricing and pass the cost on to customers.
Must-know: Chipotle’s year-to-date performance
As of October 21, 2014, Chipotle Mexican Grill’s (CMG) year-to-date (or YTD) returns were~16.3%—compared to an average return of 8.3% on the S&P 500 Index.
How Does Cracker Barrel Compare to Its Peers?
The peers outperformed Cracker Barrel based on the PE ratio. However, Cracker Barrel is ahead of its peers based on the PBV ratio.
Casual Dining Restaurants: Their 6-Month Stock Performance
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.
Starbucks’ Shares Rise on Earnings
Starbucks (SBUX) reported its earnings on April 23 after the market closed. Shares started trading at $48.55. The shares were up slightly from the day before.
Key Dates for Consumer Stocks in the First Week of October
On September 28, Goldman Sachs upgraded Brown-Forman (BF-B) to “neutral” from “sell” and raised the target price to $56 from $51.
An Investor’s Guide to Chipotle and Its Customers
Chipotle Mexican Grill (CMG) operates more than 1,700 fast-casual restaurants. Here’s everything you need to know about the business.
Must-Know: McDonald’s Has Got Tough Competition
McDonald’s (MCD) competition includes large international and national food chains as well as regional and local retailers of food products.
Could McDonald’s Valuation Multiple Rise from 3Q15?
Following its 3Q15 earnings, McDonald’s shares increased 8% on positive improvement expectations. The valuation multiple also rose 7.3% as a result of a share price increase.
Key restaurant industry formats: The casual dining business
Contrary to fast food restaurants, casual dining restaurants have a relaxed and casual ambiance with a lot of seating. They offer full table service and may also have a wine menu or full bar service.
Chipotle’s year-to-date return is in the red
As of February 6, Chipotle’s year-to-date returns were about -2%, compared to average returns of 1.7% on the S&P 500 Index.
Must-know: Darden’s promo strategies for its 2 big restaurants
Darden Restaurants (DRI) will run its Never Ending Pasta Bowl for $9.99 campaign as part of its Brand Renaissance program during the fall to boost sales at Olive Garden. Olive Garden launched the unlimited pasta campaign in September, selling 1,000 passes for $100. The pass enables a pass holder to enjoy unlimited pasta, breadsticks, and soda for 49 days, according to Fox News.
What are casual-dining restaurants?
Casual-dining restaurants Casual-dining restaurants have a relaxed, casual ambiance with a lot of seating. They offer full table service and may also have a wine menu or full bar service. The menu is higher-priced than fast-food restaurants. Olive Garden, under the umbrella of Darden Restaurants (DRI), for example, has a price range of $10 to $20 for […]
Why McDonald’s same-store sales declined across all segments
During the earnings call, management stated that McDonald’s “hasn’t changed at the same rate as its customers’ eating out expectations” in its priority markets.
Restaurants innovate menus to stay relevant
Restaurants often innovate their menus to remain relevant to their customers. This also helps restaurants keep up with shifting trends in the industry.
E. Coli Incidents Have Likely Hurt Chipotle Most in 4Q15
In late October 2015, Chipotle was the subject of a significant food safety issue. Restaurants in Oregon and Washington were linked to an E. coli outbreak.
Must-know: 3 important things that could drive Darden up 45%
However, shares do tend to fall following spinoffs, as they’re widely considered an inefficient means of distributing shares to investors.
Wall Street Bullish on Dave & Buster’s before Fiscal Q2 Results
Dave & Buster’s Entertainment (PLAY) is expected to report its fiscal second quarter of 2018 results on September 14.
Darden: Analysts’ Expectations in Fiscal 2020
Darden Restaurants’ (DRI) management expects its revenues to rise 5.3%–6.3% in fiscal 2020. The company expects its same-store sales to rise 1%–2% during fiscal 2020.
Consumer Sentiment Shines on Wall Street: Upbeat in June
The Consumer Sentiment Index came out on Friday, June 12. The composite index stood at 94.6 index points in June—a 3.9 point rise from May’s 90.7 points.
Shake Shack: Why You Should Consider the Stock’s Valuation
Previously in this series, we saw what drives Shake Shack’s (SHAK) revenue. In this article, we’ll see how the revenue growth affects Shake Shack’s share price.
Why the Restaurant Performance Index is important
The Current Situations Index is based on indicators’ past trends—same-store sales, traffic, capital expenditure, and labor. It has been at levels above 100 since March 2014.
Chipotle’s Management Has Taken Initiatives to Buoy Its Image
Chipotle’s management has always been prompt and at times preemptive in fending off concerns that may hurt the company’s policy of “food with integrity.”
Darden Reports Lower-than-Expected Losses, Stock Rises
Darden reported its earnings for the fourth quarter of fiscal 2020. The company reported an adjusted loss of $1.24 per share on revenues of $1.27 billion.
Darden analysis: Darden must increase or decrease average check
The eroding middle market Darden’s core brands—Olive Garden, Red Lobster, and LongHorn Steakhouse—face a macro shift in an ever-widening spread in US average income. The graph below shows the difference in household income between the second highest 20% and the second lowest 20% income earnings. The difference is divided by the average income of the […]
Why Darden Restaurants’ Q2 Earnings Weren’t Impressive
Darden Restaurants (DRI) reported better-than-expected earnings for the second quarter of fiscal 2020 on Thursday. However, the stock fell 6.3%.
Technology Drives Guest Satisfaction, Restaurant Stocks
A Cornell study found that a 1% increase in customer satisfaction can boost restaurant sales by $1.3 million. Technology plays a big role in this trend.
Why signs of a weak economy affect restaurants
This restaurant industry does well when the economy is expanding and poorly when the economy is contracting. In other words, it’s cyclical.
Why Dunkin’ Brands’ 3Q14 operating margins improved
Dunkin’ Brands reported $13.3 million in occupancy costs compared to $13.4 million in the corresponding quarter a year ago. This includes rental expenses related to the restaurant location, which do not fluctuate because the locations are leased for the long term at a fixed price.
Why unit growth for McDonald’s isn’t as important in the US
As of the third quarter ending September 30, 2014, McDonald’s had more than 35,860 restaurants across the globe. In the third quarter alone, it added 181 new restaurant units.
Why Chipotle had unit growth in 3Q14
At the end of 3Q14, Chipotle Mexican Grill (CMG) added 43 new units. This took the total number of restaurants to 1,724. More than 98% of Chipotle’s restaurants are in the U.S.
Must-know: Is Domino’s a good dividend stock?
Dividends, which are paid in cash, come from a company’s ability to generate excess income. Excess income is a function of higher sales and stable costs.
Darden analysis: Why spinoffs outperform the market by 10%
Why is Barington Capital Group proposing a spinoff? Barington Capital Group is encouraging Darden Restaurant Inc. (DRI) to split its brand because the firm believes that the restaurant conglomerate simply has too many layers and brands to manage that it’s likely hindering Darden’s competitive responsiveness rather than facilitating it. A spin-off, the investment firm says, […]
Darden analysis: Business overview shows limited differentiation
Restaurant industry breakdown The first thing investors should do before making an investment is understand the company’s industry, business, and strategy. We can broadly break the restaurant industry down into the limited-service and full-service sectors. Full-service restaurants are establishments where customers receive their meals at their table, receive table waiting services, and generally pay at […]
Why did Darden CEO Clarence Otis step down?
Darden announced at the end of July that chairman and CEO Clarence Otis will step down by the end of the year or when a replacement is found. Starboard CEO Jeffrey Smith said in a statement that Otis’ retirement was long overdue and that “It’s surprising to us that it took this long.”
Why Starboard Value launches proxy fight at Darden
Starboard said it believed that the market price of Darden significantly understated the value of the company’s businesses and real estate assets. It added that its operating margins were well below its peers.
The Restaurant Industry: An Overview
More Americans are eating out, and they’re eating out more often. The restaurant industry’s share of the food dollar is 51%, up from 25% in 1955.
Darden’s Stock Rose despite Weak Fiscal 2020 Guidance
Darden Restaurants (DRI) reported its fourth-quarter earnings on June 20. The company reported an adjusted EPS of $1.76 on revenues of $2.23 billion. Darden’s adjusted EPS rose 26.6% year-over-year.
Why Analysts Are Expecting Darden’s EPS to Rise in Q4
For the fourth quarter of 2019, analysts expect Darden Restaurants (DRI) to post adjusted EPS of $1.73, a rise of 24.2% from $1.39 in the corresponding quarter of fiscal 2018.
Darden’s Q3 2019 EPS Beat Analysts’ Estimates
In the third quarter of fiscal 2019, Darden Restaurants (DRI) posted adjusted EPS of $1.80, outperforming analysts’ EPS expectation of $1.75.
Darden Stock Rises Nearly 7% on Impressive Q3 2019 Results
Darden Restaurants (DRI) posted its results for the third quarter of fiscal 2019 on March 21.
Darden Stock Rose after Its Q3 Earnings
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.
How Is Darden Restaurants Expanding Its Business?
At the end of the second quarter of fiscal 2019, Darden Restaurants (DRI) operated 1,762 restaurants.
Darden Stock Rises after Management Raises Its EPS Guidance
Darden Restaurants (DRI) posted its earnings for the second quarter of fiscal 2019 on December 18.
Dave & Buster’s Stock Rose 7.9% on Second-Quarter Results
On September 14, Dave & Buster’s (PLAY) stock rose 7.9% in response to the company’s robust fiscal second-quarter results.
How Dave & Buster’s Stock Performed in 2018
As of September 5, Dave & Buster’s Entertainment (PLAY) stock has risen 4.5% YTD (year-to-date).
S&P 500’s Top Gainer: Darden Restaurants
Darden Restaurants was the S&P 500’s top gainer on June 21. Management expects the total sales to increase 4%–5% in fiscal 2019.
Why Did SunTrust Robinson Humphrey Upgrade Darden?
On June 7, SunTrust Robinson Humphrey upgraded Darden Restaurants (DRI) from “hold” to “buy” and raised its price target from $104 to $110.
Why Darden’s Stock Price Fell after Its Fiscal 3Q18 Earnings
Darden Restaurants (DRI) posted its fiscal 3Q18 earnings before the market opened on March 22.
Here’s What Drove Darden Restaurants’ Earnings in Fiscal 1Q18
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.
Darden’s Valuation Multiple Compared to Its Peers
Investors expect the devastation caused by Hurricane Harvey and Hurricane Irma in Texas and Florida to lower Darden’s sales in fiscal 1Q18.
Darden Stock Hits New 52-Week High on Strong 4Q17 Earnings
In fiscal 4Q17, Darden posted adjusted EPS (earnings per share) of $1.18 on revenues of $1.9 billion.
How Darden’s Valuation Multiple Compares with Peers
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.
Why Baskin-Robbins Had Negative Same-Store Sales Growth in 1Q17
In 1Q17, Baskin-Robbins, which operates under the umbrella of Dunkin’ Brands (DNKN), had SSSG of -2.4% in the United States and -2.0% in international markets.
Panera 2.0 Continues to Boost Same-Store Sales Growth in 4Q16
Same-store sales growth Same-store sales growth (or SSSG), expressed as a percentage, is a measure of the rise in revenue from a company’s existing restaurants over a certain period of time. SSSG is driven by ticket size and traffic. 4Q16 performance Panera Bread (PNRA) posted systemwide SSSG of 0.7%, with company-operated restaurants posting SSSG of […]
What Analysts Recommend for DRI ahead of Its Fiscal 1Q17 Earnings
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.
Darden’s Dividend Policy: What’s Expected in Fiscal 1Q17?
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.
What Do Analysts Expect of Darden’s Earnings in Fiscal 1Q17?
Darden has beaten analysts’ earnings per share estimates in the last four quarters. Usually, when earnings beat analysts’ estimates, a share’s price rises.
Why Analysts Expect DRI to Post Positive Same-Store Sales Growth
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.
Why Did Darden Restaurants’ Earnings Margin Rise in Fiscal 4Q16?
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.
What Drove Darden’s Same-Store Sales Growth in Fiscal 4Q16?
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%.
Darden Restaurants Updates Guidance after Fiscal 4Q16 Earnings
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%.
Analysts Expect No Rise in Darden’s Fiscal 4Q16 Dividends
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.
What Do Analysts Expect of Darden’s Earnings in Fiscal 4Q16?
Having discussed Darden’s estimated revenue, sources of revenue, and estimated EBIT margins, let’s now discuss analysts’ and management’s guidance.
What Do Analysts Recommend for Texas Roadhouse?
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.
Comparing The Cheesecake Factory’s Performance with Its Peers’
If you had invested $100 in The Cheesecake Factory on May 27, 2011, it would have become $157.8 by May 29, 2016.
What Is The Cheesecake Factory’s Marketing Strategy?
The Cheesecake Factory (CAKE) is competing in a highly competitive restaurant business, where innovation is absolutely necessary to keep up.
How Is The Cheesecake Factory Expanding Its Business?
By the end of 2015, CAKE was operating 188 The Cheesecake Factory restaurants, 12 Grand Lux Cafes, and one RockSugar Pan Asian Kitchen restaurant.
CAKE’s Average Check Has Increased Year-over-Year
In 1992, when CAKE was listed, its average check size was at $13.6. By the end of 2015, the company’s average check size had increased to $20.8.
What’s Been the Main Driver of CAKE’s Same-Store Sales Growth?
In the last five years, The Cheesecake Factory’s (CAKE) same-store sales growth was in the range of 1%–3%, largely driven by rises in its menu prices.
What’s Driving The Cheesecake Factory’s Revenue Growth?
The Cheesecake Factory earns its revenue from its company-owned restaurant sales, franchisee fees and royalties, and its bakery operations.
How Did The Cheesecake Factory Expand after Going Public?
In February 1992, The Cheesecake Factory (CAKE) went public by offering 2.3 million shares at $20 per share. It closed its opening day at $27.3 per share.
A Must-Know Guide to The Cheesecake Factory
The Cheesecake Factory (CAKE) is a casual restaurant chain that was founded in 1978. The California-based company owns and operates 201 restaurants.
How Did The Cheesecake Factory Come to Exist?
The origin of The Cheesecake Factory dates back to the 1940s, when Evelyn Overton found a recipe in a local newspaper that inspired her original cheesecake.
What You Should Know about Buffalo Wild Wings
Buffalo Wild Wings is a casual dining restaurant and sports bar headquartered in Minneapolis. Founded in 1982, the company is also known as BW3.
Unit Growth and Dunkin’ K-Cup Sales Drove 4Q15 Revenue Growth
Dunkin’ Brands (DNKN) earns its revenue from five different channels: Dunkin’ Donuts US, Dunkin’ Donuts International, Baskin-Robbins US, Baskin-Robbins International, and others.
How Chipotle’s Revenue Forecast Has Gone from Bad to Worse
Chipotle Mexican Grill earns the majority of its revenue from the US market. About 99% of its restaurants are located within the United States.
How Darden’s Four Corners Property Trust Spin-Off Creates Value
On November 9, 2015, Darden Restaurants (DRI) completed the spin-off of its select real estate properties to its Four Corners Property Trust.
How Darden’s Incremental Margins Have Expanded
A company’s incremental operating margin is calculated as the change in operating income divided by the change in revenue over a period.
How Olive Garden’s Remodeling is Impacting Darden’s Sales
Several companies have been remodeling their restaurants, aiming to increase customer traffic at their existing locations.
Low Inflation Could Play a Role in the Restaurant Industry
The most current reading of inflation is the PCEPI (Personal Consumption Expenditure Price Index). It includes price changes in food and energy. It was 0.21%.
How Starbucks’ CAP Segment Is Gaining Momentum
About 13% of Starbucks’ (SBUX) revenue and 11% of its operating income comes from its CAP (China, Asia, and Pacific) segment.
Why the CAP Segment Is the Next Big Market for Starbucks
Starbucks has about 5,239 restaurants in the CAP segment. It’s growing units at an average of 18.4% compared to the rest of the regions.
What to Expect from Starbucks’ Same-Store Sales Growth in 4Q15
Same-store sales growth is one of the key revenue drivers for a restaurant company like Starbucks (SBUX), McDonald’s (MCD), and Darden Restaurants (DRI).
Must-Know: How Starbucks’ Margins Are Improving
In 4Q15, Starbucks’ (SBUX) operating margin declined slightly to 20% from 19.5% in 4Q14. The decline in margins was particularly due to the company’s investments…
Will Starbucks’ Key American Market Keep Outperforming?
Since the Americas segment is the biggest segment for Starbucks, let’s look at it in more detail.
Starbucks’ Key Segments for Its 4Q15 Earnings
Starbucks (SBUX) operates restaurants in 65 countries around the world. However, 83% of its revenue comes from the Americas and the CAP segments.