Why Are These Stocks Trending on Friday?

Darden Restaurants, Inc. (NYSE:DRI) shares have opened over 2% higher today after the company reported second quarter EPS of $0.54, beating estimates by $0.12 per share on revenue of $1.61 billion, versus estimates of $1.62 billion. The company’s same-restaurant sales rose 1.6% year-over-year. The guidance is solid, with management raising their fiscal year 2016 EPS to the range of $3.25 to $3.35 from the previous range of $3.15 to $3.30. The board also authorized a new $500 million buyback program. After spinning-off its select real estate and restaurant assets into a separate REIT named Four Corners Property Trust, Inc. (NYSE: FCPT) in November, Darden Restaurants, Inc. (NYSE:DRI) is beginning to turn the corner. At the end of September, 33 funds from our database amassed over 15% of Darden’s outstanding stock.

Of the four stocks mentioned today, CarMax, Inc (NYSE:KMX) is the only company that missed both earnings and revenue estimates for its most recent quarter. For its third quarter, CarMarx reported EPS of $0.63 on revenue of $3.54 billion, missing estimates by $0.05 per share and $70 million, respectively. Used unit sales in comparable stores retreated 0.8%, while gross profit per used vehicle dropped 0.6 percentage points to $2,160. CEO Tom Folliard said:

“We had a challenging sales quarter, which together with higher advertising expenses, contributed to the year-over-year decline in third quarter net earnings. However, we continued to grow both total revenues and EPS, reflecting the contributions from new stores and continued share repurchase activity.”

CarMax spent $445.7 million to repurchase 7.7 million shares in the third quarter. The company still has $1.55 billion remaining under its repurchase program. 27 elite funds were long CarMax, Inc (NYSE:KMX) at the end of September, down from 40 at the end of June.

Disclosure: None