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DRI NYSE· Darden Restaurants Inc.
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DRI NYSE· Darden Restaurants Inc.
Earnings report Q4 2023

DRI Reports Strong Revenue Growth in Latest Quarter

Segments of revenue

DRI reported sales of $2.73 billion for the quarter ended November 26, 2023, representing a 9.7% increase compared to the same quarter last year. The company's revenue for the six months ended November 26, 2023, amounted to $5.46 billion, reflecting a growth of 10.6% compared to the same period in the previous year.

Strengths

DRI's strong revenue growth can be attributed to several factors. Firstly, the company experienced growth in same-restaurant sales, which contributed to the overall increase in revenue. DRI expects same-restaurant sales growth of 2.5% to 3.0% for fiscal 2024, which is expected to further drive sales. Additionally, DRI plans to open approximately 50 to 55 new restaurants, including Ruth's Chris new restaurant openings, which will contribute to revenue growth. The company's management also highlighted their focus on technology initiatives, which is expected to support sales growth.

Challenges

While DRI reported strong revenue growth, there are some challenges that the company faces. The increase in costs and expenses, particularly in food and beverage, restaurant labor, and general and administrative expenses, could impact profitability. Additionally, marketing expenses saw a significant increase of 23.0%, which could put pressure on the company's margins.

Noteworthy

It is worth noting that DRI's diluted net earnings per share from continuing operations increased to $1.76 for the second quarter of fiscal 2024, compared to $1.52 in the same quarter last year. Similarly, for the six months ended November 26, 2023, diluted net earnings per share increased to $3.35, compared to $3.09 in the same period last year. This indicates improved profitability for the company.

Summary

DRI reported strong revenue growth in the latest quarter, driven by same-restaurant sales growth and new restaurant openings. The company expects sales for fiscal 2024 to be approximately $11.5 billion, supported by continued same-restaurant sales growth and new restaurant openings. However, the increase in costs and expenses, particularly in food and beverage, restaurant labor, and general and administrative expenses, pose challenges to the company's profitability. Overall, DRI's financial performance reflects positive momentum, but careful management of expenses will be crucial for sustained growth.

Source documents

Form 10-Q  filed on Jan 03, 2024
114 pages scanned

Reference data

Company financials Q4 revenue 2.97B
Analyst estimates Q4 EPS beat by 51.22%
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