Darden Restaurants (NYSE:DRI) Issues Quarterly Earnings Results

Key Points

• Darden Restaurants reported a quarterly EPS of $1.97, missing the consensus estimate of $2.01, but achieved revenues of $3.04 billion, slightly exceeding expectations.
• The company declared a quarterly dividend of $1.50 per share, reflecting a 2.9% dividend yield and a payout ratio of 67.57%.
• Darden Restaurants has initiated a $1.00 billion share buyback program, indicating the board's belief that the company's shares are undervalued.

Darden Restaurants (NYSE:DRI - Get Free Report) posted its earnings results on Thursday. The restaurant operator reported $1.97 earnings per share (EPS) for the quarter, missing the consensus estimate of $2.01 by ($0.04), Zacks reports. Darden Restaurants had a net margin of 8.90% and a return on equity of 52.35%. The company had revenue of $3.04 billion during the quarter, compared to analysts' expectations of $3.03 billion. During the same quarter last year, the firm earned $1.75 EPS. Darden Restaurants's revenue for the quarter was up 10.4% on a year-over-year basis. Darden Restaurants updated its FY 2026 guidance to 10.500-10.700 EPS.

Darden Restaurants Price Performance

Shares of DRI stock traded down $7.91 during trading hours on Friday, hitting $184.83. 3,334,483 shares of the company's stock were exchanged, compared to its average volume of 1,189,895. The company has a quick ratio of 0.28, a current ratio of 0.40 and a debt-to-equity ratio of 0.96. The firm has a market cap of $21.55 billion, a P/E ratio of 19.81, a P/E/G ratio of 1.69 and a beta of 0.71. The firm has a 50 day moving average of $206.37 and a two-hundred day moving average of $206.14. Darden Restaurants has a fifty-two week low of $155.18 and a fifty-two week high of $228.27.

Darden Restaurants Announces Dividend

The business also recently declared a quarterly dividend, which will be paid on Monday, November 3rd. Shareholders of record on Friday, October 10th will be issued a $1.50 dividend. The ex-dividend date of this dividend is Friday, October 10th. This represents a $6.00 dividend on an annualized basis and a yield of 3.2%. Darden Restaurants's payout ratio is presently 67.57%.

Insider Buying and Selling at Darden Restaurants

In other news, SVP Susan M. Connelly sold 4,735 shares of the company's stock in a transaction that occurred on Tuesday, June 24th. The stock was sold at an average price of $223.78, for a total transaction of $1,059,598.30. Following the completion of the transaction, the senior vice president directly owned 4,602 shares of the company's stock, valued at $1,029,835.56. This represents a 50.71% decrease in their position. The sale was disclosed in a filing with the SEC, which is available through this link. Also, CFO Rajesh Vennam sold 5,780 shares of the company's stock in a transaction that occurred on Tuesday, June 24th. The stock was sold at an average price of $222.22, for a total value of $1,284,431.60. Following the transaction, the chief financial officer directly owned 4,555 shares of the company's stock, valued at approximately $1,012,212.10. The trade was a 55.93% decrease in their ownership of the stock. The disclosure for this sale can be found here. Over the last quarter, insiders sold 45,727 shares of company stock worth $10,022,232. 0.49% of the stock is currently owned by corporate insiders.

Institutional Inflows and Outflows

Several large investors have recently made changes to their positions in DRI. First Trust Advisors LP raised its stake in shares of Darden Restaurants by 3.3% during the 2nd quarter. First Trust Advisors LP now owns 80,001 shares of the restaurant operator's stock worth $17,438,000 after buying an additional 2,553 shares during the period. Brown Advisory Inc. purchased a new stake in shares of Darden Restaurants during the second quarter worth approximately $200,000. Cresset Asset Management LLC increased its position in shares of Darden Restaurants by 3.2% during the second quarter. Cresset Asset Management LLC now owns 2,424 shares of the restaurant operator's stock worth $529,000 after purchasing an additional 76 shares in the last quarter. Cerity Partners LLC increased its position in shares of Darden Restaurants by 15.7% during the second quarter. Cerity Partners LLC now owns 19,045 shares of the restaurant operator's stock worth $4,151,000 after purchasing an additional 2,581 shares in the last quarter. Finally, Daiwa Securities Group Inc. increased its position in shares of Darden Restaurants by 5.9% during the second quarter. Daiwa Securities Group Inc. now owns 18,183 shares of the restaurant operator's stock worth $3,964,000 after purchasing an additional 1,012 shares in the last quarter. 93.64% of the stock is owned by institutional investors and hedge funds.

Analyst Upgrades and Downgrades

A number of equities research analysts have recently weighed in on DRI shares. Evercore ISI dropped their price target on Darden Restaurants from $245.00 to $240.00 and set an "outperform" rating on the stock in a research note on Friday. Raymond James Financial dropped their price target on Darden Restaurants from $230.00 to $210.00 and set an "outperform" rating on the stock in a research note on Friday. Barclays dropped their price target on Darden Restaurants from $255.00 to $230.00 and set an "overweight" rating on the stock in a research note on Friday. Robert W. Baird dropped their price target on Darden Restaurants from $230.00 to $208.00 and set a "neutral" rating on the stock in a research note on Friday. Finally, Stephens restated an "equal weight" rating and set a $215.00 price target on shares of Darden Restaurants in a research note on Thursday. Eighteen research analysts have rated the stock with a Buy rating and ten have assigned a Hold rating to the stock. Based on data from MarketBeat.com, the company has a consensus rating of "Moderate Buy" and a consensus target price of $225.96.

Darden Restaurants declared that its Board of Directors has authorized a stock buyback program on Friday, June 20th that allows the company to buyback $1.00 billion in shares. This buyback authorization allows the restaurant operator to repurchase up to 3.8% of its shares through open market purchases. Shares buyback programs are generally an indication that the company's board of directors believes its stock is undervalued.

Darden Restaurants Company Profile

Darden Restaurants, Inc, together with its subsidiaries, owns and operates full-service restaurants in the United States and Canada. It operates under Olive Garden, LongHorn Steakhouse, Cheddar's Scratch Kitchen, Yard House, The Capital Grille, Seasons 52, Bahama Breeze, Eddie V's Prime Seafood, and Capital Burger brand names.