Darden Stock Up on Q4 Earnings Surpass Estimates, Sales Rise Y/Y

Darden Restaurants, Inc. DRI reported fourth-quarter fiscal 2025 results, with earnings and revenues beating the Zacks Consensus Estimate. The top and bottom lines increased on a year-over-year basis. Following the results, the stock inched up 4.1% in today’s pre-market trading session.DRI’s Fiscal Q4 Earnings & RevenuesDuring the fiscal fourth quarter, Darden reported adjusted earnings per share (EPS) of $2.98, beating the Zacks Consensus Estimate of $2.96. In the prior-year quarter, DRI reported an adjusted EPS of $2.65. (See the Zacks Earnings Calendar to stay ahead of market-making news.)Darden Restaurants, Inc. Price, Consensus and EPS Surprise Darden Restaurants, Inc. price-consensus-eps-surprise-chart | Darden Restaurants, Inc. QuoteTotal sales during the quarter were $3,271.7 million, surpassing the consensus mark of $3,266 million. Sales inched up 10.6% from the prior-year quarter’s level. This upside was backed by a blended same-restaurant sales increase of 4.6%. Also, contributions from 103 Chuy's restaurants and 25 net new restaurants added to the positives.DRI’s Sales by SegmentsDarden reports business under four segments — Olive Garden, LongHorn Steakhouse, Fine Dining, including The Capital Grille and Eddie V's, and Other Business.During the fiscal fourth quarter, sales at Olive Garden increased 8.1% year over year to $1.38 billion. Our estimate for the metric was $1.36 billion. Comps in the segment increased 6.9% year over year compared with a 0.6% rise reported in the previous quarter.At LongHorn Steakhouse, sales were up 9.3% year over year to $833.8 million. Our estimate for the metric was $837.9 million. Comps in the segment rose 6.7% year over year compared with 2.6% growth reported in the previous quarter.Sales in Fine Dining increased 2.3% year over year to $334.6 million. Our estimate for the metric was $380 million. Comps in the segment fell 3.3% year over year compared with a 0.8% drop reported in the previous quarter.Sales in Other Business increased 22.4% year over year to $722.3 million. Our estimate for the metric was $673.9 million. Comps in the Other Business rose 1.2% year over year compared with a 0.4% rise reported in the previous quarter.DRI’s Q4 Operating HighlightsIn the fiscal fourth quarter, total operating costs and expenses inched up 12.8% year over year to $2.89 billion. The upside was primarily due to increased food and beverage expenses, restaurant expenses, labor costs and marketing expenses. The figure surpassed our projection of $2.82 billion.DRI’s Balance SheetAs of May 25, 2025, cash and cash equivalents were $240 million compared with $194.8 million as of May 26, 2024.During the fiscal fourth quarter, inventories were $311.6 million compared with $324.6 million reported in the previous quarter. As of May 25, 2025, long-term debt was $2.13 billion compared with $1.37 billion as of May 26, 2024.During the fiscal fourth quarter, Darden’s board of directors repurchased approximately 0.2 million shares of its common stock, worth approximately $51 million. On June 18, 2025, Darden's board of directors authorized a new share repurchase program, allowing it to buy back up to $1 billion of outstanding common stock. This program has no expiration date and replaces the previous share repurchase authorization.Fiscal 2025 HighlightsTotal revenues in fiscal 2025 amounted to nearly $12.08 billion compared with $11.39 billion in fiscal 2024.Operating income in fiscal 2025 totaled $1.36 billion compared with $1.31 billion reported in fiscal 2024.In fiscal 2025, adjusted EPS was $9.55 compared with $8.88 reported in the previous year.Darden’s Fiscal 2026 OutlookFor fiscal 2026, the company expects total sales growth of 7% to 8%, including approximately 2% growth related to the 53rd week. Same-restaurant sales growth in fiscal 2026 is anticipated to be between 2% to 3.5% year over year. Adjusted diluted EPS from continuing operations is anticipated in the band of $10.50-$10.70.The company expects to open 60-65 net new restaurants and projects a total capital spending of $700-$750 million in fiscal 2026.DRI’s Zacks RankDarden currently carries a Zacks Rank #3 (Hold).Stocks to ConsiderSome better-ranked stocks in the Zacks Retail-Wholesale sector are Sprouts Farmers Market, Inc. SFM, Shake Shack Inc. SHAK and Wingstop Inc. WING.Sprouts Farmers currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks Rank #1 stocks here.The company delivered a trailing four-quarter earnings surprise of 16.5%, on average. Sprouts Farmers stock has gained 28.8% in the year-to-date period. The Zacks Consensus Estimate for Sprouts Farmers’ 2025 sales and EPS indicates growth of 13.7% and 35.5%, respectively, from the year-ago period’s levels.Shake Shack presently carries a Zacks Rank #1. The stock has inched up 1.1% in the year-to-date period. Shake Shack delivered a trailing four-quarter earnings surprise of 4.1%, on average.The Zacks Consensus Estimate for Shake Shack’s 2025 sales and EPS implies growth of 15.5% and 45.7%, respectively, from the year-ago levels.Wingstop presently holds a Zacks Rank #2 (Buy). The company delivered a trailing four-quarter earnings surprise of 6.1%, on average. The stock has gained 22.3% in the year-to-date period. The Zacks Consensus Estimate for Wingstop’s 2025 sales and EPS indicates an increase of 16.8% and 6.6%, respectively, from the year-ago levels.Zacks Names #1 Semiconductor StockIt's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Darden Restaurants, Inc. (DRI): Free Stock Analysis Report Sprouts Farmers Market, Inc. (SFM): Free Stock Analysis Report Shake Shack, Inc. (SHAK): Free Stock Analysis Report Wingstop Inc. (WING): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks