The 10-second takeaway
For the quarter ended Nov. 27 (Q2), Darden Restaurants met expectations on revenues and missed on earnings per share.
Compared to the prior-year quarter, revenue expanded, and earnings per share dropped significantly.
Margins dropped across the board.
Darden Restaurants logged revenue of $1.8 billion. The 27 analysts polled by S&P Capital IQ predicted sales of $1.8 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.
EPS came in at $0.41. The 31 earnings estimates compiled by S&P Capital IQ anticipated $0.42 per share. GAAP EPS of $0.41 for Q2 were 23% lower than the prior-year quarter's $0.53 per share.
Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.
For the quarter, gross margin was 20.3%, 200 basis points worse than the prior-year quarter. Operating margin was 5.3%, 200 basis points worse than the prior-year quarter. Net margin was 2.9%, 140 basis points worse than the prior-year quarter.
Source: S&P Capital IQ. Quarterly periods.
What does the future hold?
Next quarter's average estimate for revenue is $2.1 billion. On the bottom line, the average EPS estimate is $1.20 (There are 26 revenue estimates and 31 EPS estimates.)
For the full year ending 2012, the average estimate for revenue is $8.0 billion. The average EPS estimate is $3.59. (There are 27 revenue estimates and 30 EPS estimates.)
The stock has a three-star rating at Motley Fool CAPS, with 386 members out of 499 rating the stock outperform, and 113 members rating it underperform. Among 158 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 126 give Darden Restaurants a green thumbs-up, and 32 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Darden Restaurants is outperform, with an average price target of $55.54.
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