Stock Market Today: Darden Restaurants Crumbles and CarMax Soars
The Dow Jones Industrial Average has gained 27 points in pre-market trading, suggesting a positive start to the stock market today. World shares hardly budged in overnight trading: Japan's Nikkei fell by 0.08% while European stocks were down by 0.04% as of 8 a.m. EDT.
Meanwhile, breaking news this morning has Darden Restaurants and CarMax stocks on the move.
Image source: Darden Restaurants.
Darden Restaurants today posted disappointing results for its fiscal fourth quarter. Profit dove from $1.01 a year ago to $0.65 a share, well below the $0.95 that Wall Street was expecting. On the other hand, revenue ticked higher by 1% to $2.32 billion, which was in line with analysts forecasts. But Darden's earnings were swamped by a host of charges related to its sale of the Red Lobster chain. Those expenses cleaved about $0.19 out of earnings this quarter, management estimated. The rest of Darden's results weren't much better: Olive Garden posted same-store sales and customer traffic declines in each of the three months in the quarter, while LongHorn Steakhouse managed sales gains only through higher prices. Both chains also booked a drop in operating profit as expenses rose faster than revenue. Red Lobster, which won't be Darden's problem going forward, continued to post awful numbers, including 10% drops in customer traffic in March and in May. The stock was down 4.3% in pre-market trading.
CarMax this morning booked surprisingly strong earnings results on both the top and bottom lines. The auto retailer's sales jumped higher by 13% to reach a record $3.75 billion. Earnings spiked 19% to $0.76 a share. Wall Street had expected sales of just $3.6 billion and profit of $0.67 a share. CEO Tom Folliard pointed out in a press release that CarMax's gains were "broad-based" in the quarter, "with contributions from our retail and wholesale operations, as well as CAF," the company's financing arm. There was a lot for investors to like in this quarterly report, including the fact that CarMax sold 10% more used vehicles. But one particularly strong number is 12%, which is the growth that CarMax managed in its gross profit level. The stock was up 15.2% in pre-market trading.
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The article Stock Market Today: Darden Restaurants Crumbles and CarMax Soars originally appeared on Fool.com.Demitrios Kalogeropoulos has no position in any stocks mentioned. The Motley Fool recommends CarMax. The Motley Fool owns shares of CarMax. 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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