The 10-second takeaway
For the quarter ended May 26 (Q4), Darden Restaurants beat slightly on revenues and missed estimates on earnings per share.
Compared to the prior-year quarter, revenue grew. Non-GAAP earnings per share dropped. GAAP earnings per share contracted.
Margins shrank across the board.
Darden Restaurants booked revenue of $2.30 billion. The 27 analysts polled by S&P Capital IQ expected to see sales of $2.26 billion on the same basis. GAAP reported sales were 11% higher than the prior-year quarter's $2.07 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 $1.02. The 14 earnings estimates compiled by S&P Capital IQ averaged $1.05 per share. Non-GAAP EPS of $1.02 for Q4 were 11% lower than the prior-year quarter's $1.15 per share. GAAP EPS of $1.01 for Q4 were 12% lower than the prior-year quarter's $1.15 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 22.1%, 190 basis points worse than the prior-year quarter. Operating margin was 8.4%, 270 basis points worse than the prior-year quarter. Net margin was 5.8%, 150 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $2.21 billion. On the bottom line, the average EPS estimate is $0.82.
Next year's average estimate for revenue is $9.11 billion. The average EPS estimate is $3.17.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 406 members out of 529 rating the stock outperform, and 123 members rating it underperform. Among 159 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 138 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 $50.56.
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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.