The 10-second takeaway
For the quarter ended Nov. 25 (Q2), Darden Restaurants met expectations on revenues and missed estimates on earnings per share.
Compared to the prior-year quarter, revenue expanded and GAAP earnings per share dropped significantly.
Margins contracted across the board.
Darden Restaurants logged revenue of $1.96 billion. The 25 analysts polled by S&P Capital IQ looked for revenue of $1.95 billion on the same basis. GAAP reported sales were 7.0% higher than the prior-year quarter's $1.83 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.26. The 29 earnings estimates compiled by S&P Capital IQ predicted $0.27 per share. GAAP EPS of $0.26 for Q2 were 37% lower than the prior-year quarter's $0.41 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 20.0%, 30 basis points worse than the prior-year quarter. Operating margin was 3.9%, 140 basis points worse than the prior-year quarter. Net margin was 1.7%, 120 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $2.32 billion. On the bottom line, the average EPS estimate is $1.13.
Next year's average estimate for revenue is $8.60 billion. The average EPS estimate is $3.41.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 389 members out of 508 rating the stock outperform, and 119 members rating it underperform. Among 140 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 119 give Darden Restaurants a green thumbs-up, and 21 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Darden Restaurants is hold, with an average price target of $60.00.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool owns shares of Darden Restaurants. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.