Darden Restaurants (DRI) 2021 Q3 Earnings Report

Darden Restaurants (NYSE:DRI) traces its roots back to 1938 when its founder Bill Darden opened his first store, called The Green Frog, in Waycross, Georgia. The popularity of seafood at his restaurant inspired Darden to open his first Red Lobster restaurant in 1968, laying the foundation of Darden Restaurants in its current form.  Today, it operates restaurants in the U.S. and Canada under several brand names such as Red Lobster, LongHorn Steakhouse, and Olive Garden, among others.

Like rivals, Darden also struggled to generate revenue over the last year. The Covid-19 crisis forced the company to close its dining facilities. It mostly relied on takeout and delivery options during the pandemic. As a result, Darden stock stayed nearly flat in terms of price change in 2020.

The multi-brand restaurant operator recently announced better-than-expected financial results for the third quarter. The Orlando, Florida-based company reported earnings of $128.7 million, or 98 cents per share for the three months ended February 28, well below $232.3 million, or $1.89 per share in the comparable quarter of 2020. Analysts on average were looking for earnings of 69 cents per share.

Revenue declined nearly 26 percent on a year-over-year basis to $1.73 billion, beating the consensus forecast of $1.63 billion. Same-store sales in the quarter fell 20.6 percent during the quarter. The drop in sales was mainly attributed to stricter regulations for restaurants in many states following a resurgence in coronavirus cases.

Commenting on the quarter, CEO Gene Lee said in a statement, “After all we have been through, our winning strategy, combined with our team members’ resilience and passion, has allowed Darden and our brands to emerge stronger as evidenced by our solid performance this quarter. Once again we were able to deliver strong profitability in a constantly changing environment while keeping our guests and team members safe.”

Looking forward, Darden Restaurants expects earnings in the range of $1.60 per share to $1.70 per share and revenue of around $2.1 billion for the fourth quarter.

See also Top 10 Restaurant Stocks Under $10 and 10 Best Restaurant Stocks To Buy.