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Darden Restaurants Inc DRI Stock Quote

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Morningstar‘s Stock Analysis DRI

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Economic Moat


Capital Allocation


Darden Continues to Execute Amid Macro Challenges and Softening Sentiment; Shares Fairly Valued

Sean Dunlop Equity Analyst

Analyst Note

| Sean Dunlop |

Narrow-moat (based on a cost advantage) Darden Restaurants outstripped our expectations in its first fiscal quarter, with $2.4 billion in sales (up 6.2%) and diluted EPS of $1.56 (versus our 5.9% and $1.50 forecasts, respectively). While this performance was impressive against a record mark last year, pricing contributed 6.5% to the top line, implying flat volume. Still, we are encouraged by the same-store sales growth observed across its restaurant brands despite a weaker macro backdrop. In fact, management noted little sign of weakness among low-income consumers (earning less than $50,000 per year) thus far. However, we remain optimistic about Darden's position given its more diversified brand portfolio, better value proposition, and moves to attract a more affluent consumer base (all relative to 2007-09).

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Key Statistics DRI

Company Profile DRI

Business Description

Darden Restaurants is the largest restaurant operator in the U.S. full-service space, with consolidated revenue of $9.6 billion in fiscal 2022 resulting in 3%-4% full-service market share (per NRA data and our calculations). The company maintains a portfolio of eight restaurant chains: Olive Garden, LongHorn Steakhouse, Cheddar’s Scratch Kitchen, Yard House, The Capital Grille, Seasons 52, Eddie V’s, and Bahama Breeze. Darden generates revenue almost exclusively from company-owned restaurants, though a small network of franchised restaurants and consumer-packaged goods sales through the traditional grocery channel contribute modestly. As of the end of Darden's fiscal 2022, the company operated 1,864 restaurants in the U.S.

1000 Darden Center Drive
Orlando, FL, 32837
T +1 407 245-4000
Industry Restaurants
Most Recent Earnings May 31, 2022
Fiscal Year End May 29, 2023
Employees 178,956

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