In This Article:
Darden Restaurants (NYSE:DRI) just served up a feast for investors, sending shares soaring nearly 15% this morning after a fiscal Q2 performance that outpaced expectations. Adjusted earnings landed at $2.03 per share, nudging past Wall Street's $2.02 forecast, while revenue climbed 6% year-over-year to $2.89 billion. The real MVP? LongHorn Steakhouse, which delivered a sizzling 7.5% same-store sales boost, outshining the broader restaurant portfolio. Even as fine dining lagged with a 5.8% dip, Darden's extended promotional strategies, like Olive Garden's longer unlimited pasta deal, brought value-seeking diners back through the door.
CEO Rick Cardenas struck an upbeat tone, emphasizing that Darden's strategy is built for the long haul. All four of our largest brands delivered positive same-restaurant sales, he noted, pointing to consistent execution as the backbone of this quarter's success. Riding the momentum, Darden bumped up its full-year guidance, projecting sales of $12.1 billion and EPS between $9.40 and $9.60comfortably above analyst estimates. Market data also shows signs of an industry revival, with November restaurant traffic notching its first year-over-year growth in 2024, providing a tailwind for the company's upward trajectory.
Investors wasted no time celebrating, pushing Darden's stock up a lot. The takeaway? Darden isn't just surviving; it's thriving by staying laser-focused on value, adaptability, and execution. For investors looking to capitalize on the restaurant sector's recovery, Darden is proving it's not just a safe betit's a strong contender for long-term growth.
This article first appeared on GuruFocus.