Tag: Darden

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Cramer counts Chipotle, Darden as ‘final man standing’ restaurant performs

Cramer counts Chipotle, Darden as 'last man standing' restaurant plays

CNBC’s Jim Cramer on Monday released a list of stocks he expects to benefit from the “last man standing scenario”.

“After a year of slaughter, large companies with deep pockets are triumphing over their smaller competitors who didn’t make it,” said the Mad Money host.

The scenario will play out briskly in the restaurant industry, Cramer said.

Last year, more than 110,000 eating and drinking establishments closed temporarily or permanently during the Covid-19 pandemic. The impact resulted in the loss of 2.5 million jobs in the industry, according to the National Restaurant Association.

Coronavirus restrictions in New York City also pushed Cramer to close the doors of his two Brooklyn neighborhood restaurants until coronavirus vaccines spread and the U.S. health crisis came under control.

“As a restaurant owner, I can tell you that companies like Darden and Chipotle are now getting stakes in empty storefronts,” he said.

In addition to Chiptole and Darden, the parent company of Olive Garden, Cramer pointed to Cheesecake Factory, Yum Brands, Texas Roadhouse and Starbucks as beneficiaries of the current environment.

“Now that tens of thousands of small businesses have gone down so sadly and unfortunately, their bigger rivals are the last of the men, which means they will make a fortune as the country reopens because there is no one left to challenge them.” “”

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Business

Darden Eating places (DRI) Q3 2021 earnings beat

Darden Restaurants (DRI) Q3 2021 earnings beat

Guests wearing protective masks wait outside a restaurant in Olive Garden in Thornton, Colorado Friday, March 19, 2021.

Chet Strange | Bloomberg | Getty Images

Darden Restaurants reported quarterly results Thursday that exceeded analysts’ expectations as customers visited Olive Garden and its other chains more than expected.

The company predicts that fiscal fourth quarter results will show it is well on its way to recovering from the effects of the coronavirus pandemic.

The company’s shares rose more than 4% in premarket trading.

The company reported for the quarter ended February 28, versus Wall Street’s expectations, based on an analyst survey conducted by Refinitiv:

  • Earnings per share: 98 cents compared to 69 cents expected
  • Revenue: $ 1.73 billion versus $ 1.63 billion expected

The company reported net income of $ 128.7 million, or 98 cents per share, for the third quarter, compared to $ 232.3 million, or $ 1.89 per share, a year earlier. Analysts surveyed by Refinitiv expected earnings of 69 cents per share.

Net sales decreased 26.1% to $ 1.73 billion, beating expectations of $ 1.63 billion. Total Darden sales in the same store decreased 26.7% for the quarter, compared to the same store sales decrease of 20.6% in the second quarter. In the three months ended February 28, many states imposed stricter mandates on restaurants as new Covid-19 cases increased and hurt sales for the entire industry.

Olive Garden, which accounts for roughly half of Darden’s sales, posted a 25.8% drop in sales in the same store. LongHorn Steakhouse is recovering faster and is seeing sales in the same store drop just 12.6%.

Dardens gourmet business, which includes The Capital Grille, remains hardest hit by the pandemic. Sales in the same store fell by 45.2% and declined more than in the previous quarter.

For the fourth quarter of Darden’s fiscal year, the company forecasts total revenue of $ 2.1 billion and earnings per share from continuing operations of $ 1.60 to $ 1.70. The pace of vaccinations is accelerating, which will encourage more consumers to eat in restaurants. Darden’s sales in the same store turned positive for the week ending March 21 as it begins the introduction of restaurant bans.

Darden also said it plans to spend about $ 17 million to give a one-time bonus to hourly restaurant workers and raise wages. As of Monday, every hour worker in their restaurants will earn at least $ 10 an hour, including tips. Hourly wages will rise to $ 11 in January and will rise to $ 12 an hour the following January.

The company’s move to increase workers’ compensation follows an early push by President Joe Biden to raise the federal minimum wage to $ 15 an hour, including workers with tips. Democrats removed the proposal from the Covid-19 relief bill, but they will likely try again while Biden is in office.

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Business

Darden Eating places (DRI) Q2 2021 earnings beat, gross sales fall brief

Darden Restaurants (DRI) Q2 2021 earnings beat, sales fall short

Customers arrive at an Olive Garden location in San Antonio, Texas.

Callaghan O’Hare | Bloomberg | Getty Images

Darden Restaurants reported quarterly sales on Friday that fell short of analysts’ expectations as another wave of pandemic food restrictions weighed on sales in the same store.

For the next quarter, usually the best of the year, Olive Garden’s parent company expects sales to decline by 30% to 35%. CFO Rick Cardenas said the company doesn’t expect significant revenue improvements until the fourth quarter of fiscal 2021, which ends in May.

The company’s shares fell 1.6% in premarket trading.

The company reported for the quarter ended November 29th, versus Wall Street’s expectations, based on an analyst survey conducted by Refinitiv:

  • Earnings per share: 73 cents compared to 71 cents expected
  • Revenue: $ 1.66 billion versus $ 1.69 billion expected

The company reported net income of $ 96 million, or 73 cents per share, for the second quarter, compared to $ 24.7 million, or 20 cents per share, a year earlier. Analysts polled by Refinitiv expected earnings of 71 cents per share.

Net sales declined 19.4% to $ 1.66 billion, falling short of expectations of $ 1.69 billion. Sales of all brands in the same store decreased 20.6% in the quarter. Revenue was also impacted by the timing of Thanksgiving, which shifted from the third fiscal quarter to the second fiscal quarter this year.

Olive Garden, the jewel in Dardens portfolio, saw sales drop 19.9% ​​in the same store. The chain has focused its marketing on its convenient pickup options and main menu items, rather than limited-time promotions that could hurt profit margins. LongHorn Steakhouse, which saw strong demand for its take-out, saw sales in the same store decline just 11.1%.

Dardens gourmet business, which also includes The Capital Grille, was hit hardest. The segment’s revenue in the same store decreased 31% for the quarter.

During the previous quarter’s earnings call, CEO Gene Lee said Darden needs states to relax its food restrictions in order to improve sales in the same business. Instead, the governors did the opposite when the number of new Covid-19 cases increased. About a quarter of Darden restaurants had their dining rooms closed by December 13, up from just 8% of locations in the week ending November 8.

“We have been able to do business effectively and move it off-premise, and we can do it effectively again,” Lee told analysts.

During November and December, combined sales of Darden in the same store declined in turn as more states rolled back restrictions on personal dining and temperatures dropped. After falling just 23.4% for the week ending November 8, sales in the same store were down 36.9% for the week ending December 13.

The company reintroduced its program to pay employees whose dining rooms were closed, costing Darden $ 3 million in the quarter.

For the third quarter of the financial year, Darden expects earnings per share from continuing operations of 50 to 75 cents. The company reiterated its full year guidance of 35 to 40 net new restaurants and total investments of $ 250 to 300 million.

Lee said the company is seeing more availability in real estate, but rents have not fallen significantly despite permanent closings. Darden predicts that 5% to 15% of restaurants will close permanently due to the pandemic.

Darden also announced some changes in its management. Cardenas will become President and Chief Operating Officer in January and Treasurer Rajesh Vennam will take over as Chief Financial Officer. The board also voted to appoint Lee as chairman, replacing Charles Elseeby, the former CFO of Brinker International and Michaels Stores.

The company will pay a dividend of 37 cents to shareholders on February 1st.