Darden Restaurants, Inc. (NYSE:DRI) Surpasses Market Expectations
Summary
Darden Restaurants (NYSE:DRI) reported strong fiscal Q4 results, beating analyst expectations for both EPS ($2.98 vs $2.96 estimate) and revenue ($3.27 billion vs estimate). The company saw revenue growth driven by acquisitions and new restaurant openings, alongside solid same-store sales growth. Shares increased in premarket trading following the positive report, highlighting investor confidence in Darden's performance.
Darden Restaurants (NYSE:DRI) Beats Expectations with Strong Q4 Performance
Darden Restaurants, Inc. (NYSE:DRI), the parent company of popular brands like Olive Garden and LongHorn Steakhouse, reported strong financial results for its fiscal fourth quarter, surpassing market expectations for both earnings and revenue. The positive report led to an increase in the company's share price in premarket trading.
Key Financial Highlights
- Earnings Per Share (EPS): Darden reported adjusted EPS of $2.98 for the quarter ending May 2025, exceeding the Zacks Consensus Estimate of $2.96. This represents a significant increase from the $2.65 EPS reported in the same period last year.
- Revenue: Quarterly revenue reached $3.27 billion, surpassing the Zacks Consensus Estimate by 0.18%. This marks substantial growth from the $2.96 billion reported a year ago.
- Net Income: The company reported a fiscal fourth-quarter net income of $303.8 million, or $2.58 per share. Excluding costs related to the acquisition of Chuy's Tex Mex, adjusted earnings were $2.98 per share.
- Same-Store Sales: Same-store sales grew by 4.6%, exceeding the StreetAccount estimate of 3.5%.
Performance Drivers
The revenue growth was partly driven by the acquisition of 103 Chuy's restaurants and the addition of 25 new restaurants during the period. Despite only surpassing consensus EPS estimates once in the last four quarters, Darden has exceeded revenue expectations twice in the same timeframe, indicating robust sales performance.
Market Reaction and Valuation Metrics
Following the release of the positive earnings report on June 20, 2025, Darden's shares rose by over 2% in premarket trading. The company's current valuation metrics include:
- Price-to-Earnings (P/E) Ratio: Approximately 25.32
- Price-to-Sales Ratio: Approximately 2.27
- Enterprise Value to Sales Ratio: Approximately 2.76
- Enterprise Value to Operating Cash Flow Ratio: Approximately 19.48
- Earnings Yield: Approximately 3.95%
- Debt-to-Equity Ratio: Approximately 2.76
- Current Ratio: Approximately 0.39
Darden operates within the competitive Zacks Retail - Restaurants industry and continues to demonstrate resilience and growth potential, supported by its portfolio of well-established restaurant brands.