Company Overview - Darden Restaurants, Inc. (DRI) has a market cap of $22.5 billion and operates over 1,700 locations in North America under brands like Olive Garden and LongHorn Steakhouse [1][2] Stock Performance - Darden's shares have decreased 16.4% over the past three months, underperforming the Consumer Discretionary Select Sector SPDR Fund (XLY), which increased by 14.7% in the same period [3] - Year-to-date, DRI stock is down slightly, while XLY has risen by 7.6% [4] - Over the past 52 weeks, Darden's shares gained 8.1%, compared to XLY's 22.5% return [4] Recent Financial Results - In Q1 2026, Darden reported adjusted EPS of $1.97, missing Wall Street estimates, while quarterly sales of $3.04 billion met forecasts [5] - Operating costs surged by 8.8% to $2.71 billion, influenced by higher ingredient and marketing expenses [5] - Management raised its annual sales growth outlook to 7.5% - 8.5%, but the midpoint fell slightly below analysts' expectations, affecting investor sentiment [5] Competitive Landscape - Rival Yum! Brands, Inc. (YUM) has outperformed DRI, with shares increasing by 11.5% over the past 52 weeks and 8.9% year-to-date [6] - Despite Darden's underperformance, analysts maintain a "Moderate Buy" consensus rating, with a mean price target of $234.64, indicating a potential upside of 26.2% from current levels [6]

Core Viewpoint - Darden Restaurants Inc experienced a significant decline in stock price following the release of disappointing first-quarter results, despite some positive performance indicators from its Olive Garden brand [1][2]. Group 1: Financial Performance - Darden Restaurants reported mixed first-quarter results, with same-store sales growth of 4.7%, surpassing the consensus estimate of 4.4% [3]. - Traffic at Olive Garden and LongHorn increased by 3.6% and 3.2%, respectively, both exceeding the industry traffic growth of 2.6% [4]. Group 2: Analyst Insights - TD Cowen noted that the stock decline was influenced by high expectations for Olive Garden and recent share price appreciation, despite Olive Garden outperforming expectations for the second consecutive quarter, with the outperformance gap narrowing to 90 basis points [2]. - BTIG highlighted that Darden's strategy of under-pricing competitors is attracting consumers but may negatively impact profitability in the short term [4]. Group 3: Stock Ratings and Price Targets - TD Cowen analyst Andrew Charles maintained a Hold rating and reduced the price target from $235 to $200 [5]. - BTIG analyst Peter Saleh reiterated a Buy rating while lowering the price target from $235 to $225 [5].

Core Insights - Darden Restaurants Inc. (NYSE:DRI) experienced a significant decline of 7.69% on Thursday, closing at $192.74, following a miss on analyst earnings estimates for Q1 of fiscal year 2026 [1][2] - The company reported earnings per share of $1.97, falling short of the expected $2.00 [1][2] Financial Performance - Net income for Darden Restaurants increased by 24% to $257.8 million, up from $207.2 million in the same period last year [2] - Sales rose by 10.4% to $3.04 billion, compared to $2.76 billion year-on-year, driven by a same-restaurant sales increase of 4.7% and contributions from the acquisition of 103 Chuy's Tex Mex restaurants and 22 net new restaurants [2] Management Commentary - The President and CEO of Darden Restaurants, Rick Cardenas, stated that the company had a strong start to the fiscal year, with same-restaurant sales and earnings growth exceeding expectations [3] - Cardenas emphasized that the strength of the results reflects the effectiveness of the company's strategy, which focuses on operational excellence and leveraging competitive advantages for long-term success [4]

Group 1 - Darden Restaurants reported first-quarter earnings of $1.97 per share, missing the analyst consensus estimate of $2.00 per share [1] - Quarterly sales were $3.004 billion, which also fell short of the analyst consensus estimate of $3.040 billion [1] - Darden's President & CEO Rick Cardenas noted a strong start to the fiscal year with same-restaurant sales and earnings growth exceeding expectations [1] Group 2 - Darden reaffirmed its fiscal 2026 adjusted EPS guidance at $10.50–$10.70, compared to the $10.68 consensus estimate [2] - The company raised its fiscal 2026 sales outlook to $12.983 billion–$13.104 billion from a previous range of $12.922 billion–$13.043 billion, against the $13.078 billion Street estimate [2] - Following the earnings announcement, Darden shares fell 7.7% to close at $192.74 [2] Group 3 - BTIG analyst Peter Saleh maintained a Buy rating on Darden but lowered the price target from $235 to $225 [7] - TD Cowen analyst Andrew M. Charles maintained a Hold rating and cut the price target from $235 to $200 [7] - Keybanc analyst Eric Gonzalez maintained an Overweight rating while lowering the price target from $240 to $225 [7]

Group 1 - Darden Restaurants reported first-quarter earnings of $1.97 per share, missing the analyst consensus estimate of $2.00 per share [1] - Quarterly sales were $3.004 billion, which also fell short of the analyst consensus estimate of $3.040 billion [1] - Darden's President & CEO Rick Cardenas noted a strong start to the fiscal year with same-restaurant sales and earnings growth exceeding expectations [1] Group 2 - Darden reaffirmed its fiscal 2026 adjusted EPS guidance at $10.50–$10.70, compared to the $10.68 consensus estimate [2] - The company raised its fiscal 2026 sales outlook to $12.983 billion–$13.104 billion from a previous range of $12.922 billion–$13.043 billion, against the $13.078 billion Street estimate [2] - Following the earnings announcement, Darden shares fell 7.7% to close at $192.74 [2] Group 3 - BTIG analyst Peter Saleh maintained a Buy rating on Darden but lowered the price target from $235 to $225 [7] - TD Cowen analyst Andrew M. Charles maintained a Hold rating and cut the price target from $235 to $200 [7] - Keybanc analyst Eric Gonzalez maintained an Overweight rating while lowering the price target from $240 to $225 [7]

All right, two minutes before we get to the final opening bell of the week. Let's get in a mad dash. >> What do you do with the best restaurant company.Uh, Olive Garden. Fantastic margins. They do have a long, you know, you know, this long run.It's not doing so much steak. >> Yeah. >> But I would tell you this thing went down hard on a miss.3% yield. It is still the flagship. I think it can come back.It can come back, but you have to have some dimmunition in food prices because there's certainly no there's ...

Group 1 - Olive Garden is recognized as a leading restaurant company with strong margins, but it has recently faced challenges leading to a decline in performance [1] - There is a concern about demand destruction in the food industry, particularly related to high steak prices affecting consumer choices [2] - The liquor market is experiencing a decline in prices, attributed to reduced consumption, which may impact overall sales in the beverage sector [3] Group 2 - Beer sales are being affected, with a notable shift in consumer preferences, indicating a potential change in the beverage landscape [4] - The rise of mocktails suggests a changing trend in consumer behavior towards non-alcoholic options, which could influence future market dynamics [4]

Core Viewpoint - Darden Restaurants, Inc. is facing mixed sentiments ahead of its fiscal 2026 first-quarter earnings report, with a recommendation to buy shares cautiously before the results are announced [1][2]. Group 1: Company Overview - Darden Restaurants, Inc. operates a network of full-service restaurants in the U.S. and Canada, owning popular brands such as Olive Garden and LongHorn Steakhouse [2]. - The company has a history of strong financial performance, with recent quarters showing consistent results [2]. Group 2: Market Sentiment and Recommendations - Jim Cramer noted that the restaurant sector has recently fallen out of favor, suggesting a cautious approach to investing in Darden [1]. - Cramer advised potential investors to consider buying shares of Olive Garden ahead of the earnings report, with a strategy to increase holdings if the stock price declines post-results [1]. - The company is recognized for its solid dividend, which adds to its appeal despite the unpredictability in the restaurant industry [1]. Group 3: Future Outlook - Darden's management provided a positive full-year forecast during a recent conference call, indicating confidence in the company's future performance [2]. - CEO Rick Cardenas introduced a new five-year plan that was well-received, suggesting a strategic direction that could enhance long-term growth [2].

Core Insights - Darden Restaurants is experiencing sales growth despite rising food costs, indicating resilience in consumer spending on casual dining [2][3] - The company reported a 4.7% increase in adjusted earnings to $1.97 per share, reflecting a 12.6% year-over-year growth [2] Financial Performance - Darden's same-restaurant sales and earnings growth exceeded expectations at the start of the fiscal year [3] - The company raised its full-year total sales growth forecast, showing confidence in its new restaurant pipeline [7] Consumer Behavior - Shifts in consumer behavior are noted, with guests seeking "price certainty" and greater perceived value [3] - Olive Garden is testing smaller portions at reduced prices in about 40% of its restaurants, which has shown an encouraging initial response [3][4] Pricing Strategy - Darden is keeping menu price hikes below its own inflation rate as a strategy to navigate increasing costs [4][5] - The company projects its pricing in the second quarter to be about 100 basis points below total inflation [6] Cost Pressures - Darden raised its commodity inflation forecast for the year to 3% to 4%, attributed to significant spikes in beef and seafood costs [6][7] - Management believes current beef prices are unsustainable, having locked in prices for only a quarter of its supply over the next six months [7]

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