The Dow Jones Industrial Average (^DJI -0.98%) has gained 27 points in pre-market trading, suggesting a positive start to the stock market today. World shares hardly budged in overnight trading: Japan's Nikkei fell by 0.08% while European stocks were down by 0.04% as of 8 a.m. EDT.
Meanwhile, breaking news this morning has Darden Restaurants (DRI -0.04%) and CarMax (KMX -1.49%) stocks on the move.
Image source: Darden Restaurants.
Darden Restaurants today posted disappointing results for its fiscal fourth quarter. Profit dove from $1.01 a year ago to $0.65 a share, well below the $0.95 that Wall Street was expecting. On the other hand, revenue ticked higher by 1% to $2.32 billion, which was in line with analysts forecasts. But Darden's earnings were swamped by a host of charges related to its sale of the Red Lobster chain. Those expenses cleaved about $0.19 out of earnings this quarter, management estimated. The rest of Darden's results weren't much better: Olive Garden posted same-store sales and customer traffic declines in each of the three months in the quarter, while LongHorn Steakhouse managed sales gains only through higher prices. Both chains also booked a drop in operating profit as expenses rose faster than revenue. Red Lobster, which won't be Darden's problem going forward, continued to post awful numbers, including 10% drops in customer traffic in March and in May. The stock was down 4.3% in pre-market trading.
CarMax this morning booked surprisingly strong earnings results on both the top and bottom lines. The auto retailer's sales jumped higher by 13% to reach a record $3.75 billion. Earnings spiked 19% to $0.76 a share. Wall Street had expected sales of just $3.6 billion and profit of $0.67 a share. CEO Tom Folliard pointed out in a press release that CarMax's gains were "broad-based" in the quarter, "with contributions from our retail and wholesale operations, as well as CAF," the company's financing arm. There was a lot for investors to like in this quarterly report, including the fact that CarMax sold 10% more used vehicles. But one particularly strong number is 12%, which is the growth that CarMax managed in its gross profit level. The stock was up 15.2% in pre-market trading.
