Golf Clap for Darden Restaurants

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Darden Restaurants (NYS: DRI) reported earnings on March 22. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Feb. 24 (Q3), Darden Restaurants met expectations on revenues and met expectations on earnings per share.

Compared to the prior-year quarter, revenue increased. GAAP earnings per share dropped significantly.


Margins shrank across the board.

Revenue details
Darden Restaurants reported revenue of $2.26 billion. The 27 analysts polled by S&P Capital IQ hoped for revenue of $2.26 billion on the same basis. GAAP reported sales were the same as the prior-year quarter's.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $1.02. The 31 earnings estimates compiled by S&P Capital IQ forecast $1.01 per share. GAAP EPS of $1.02 for Q3 were 18% lower than the prior-year quarter's $1.25 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 22.4%, 230 basis points worse than the prior-year quarter. Operating margin was 9.1%, 230 basis points worse than the prior-year quarter. Net margin was 6.0%, 160 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)

Looking ahead
Next quarter's average estimate for revenue is $2.25 billion. On the bottom line, the average EPS estimate is $1.04.

Next year's average estimate for revenue is $8.51 billion. The average EPS estimate is $3.17.

Investor sentiment
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 402 members out of 525 rating the stock outperform, and 123 members rating it underperform. Among 159 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 137 give Darden Restaurants a green thumbs-up, and 22 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Darden Restaurants is hold, with an average price target of $50.23.

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The article Golf Clap for Darden Restaurants originally appeared on Fool.com.

Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool owns shares of Darden Restaurants. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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