Darden Posts Q1 Gross sales Beat, However Profitability Issues Stay – Darden Eating places (NYSE:DRI)

Shares of Darden Eating places Inc DR tanked in early buying and selling on Friday, after the corporate reported downbeat first quarter outcomes.

Listed here are some analyst projections:

• TD Cowen analyst Andrew Charles maintained a Maintain score, whereas decreasing the value goal from $235 to $200.
• BTIG analyst Peter Saleh reiterated a Purchase score, whereas trimming the value goal from $235 to $225.

Try different analyst inventory rankings.

TD Cowen: Though the magnitude was shocking, the decline in Darden Eating places’ inventory was resulting from “elevated Olive Backyard expectations” and the share value appreciation over the past 4 weeks, Charles stated in a be aware. Whereas Olive Backyard outperformed expectations for the second straight quarter, the outperformance hole narrowed to 90 foundation factors (bps), he added.

Administration indicated that the power within the quarter had continued into September throughout the portfolio, the analyst acknowledged. The subsequent catalyst may very well be Olive Backyard being added to Uber Applied sciences Inc’s UBER Uber Eats market, he commented.

BTIG: Darden Eating places reported blended first-quarter outcomes, with mid-single-digit comps and “progress throughout all earnings cohorts,” Saleh stated. The corporate’s same-store gross sales progress of 4.7% got here in greater than consensus of 4.4%, he added.

Visitors at Olive Backyard and LongHorn grew by 3.6% and three.2%, respectively. Every franchise outpaced the business visitors of two.6%, the analyst wrote. Whereas the corporate’s technique to under-price opponents is being rewarded by shoppers, this impacts profitability within the close to time period, he additional acknowledged.

DRI Worth Motion: Shares of Darden Eating places had declined by 3.01% to $187.10 on the time of publication on Friday.

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