Ahead Of Darden Restaurants' Q3 Results

(RTTNews) - The Orlando-based restaurant chain Darden Restaurants Inc. (DRI) believes its value-creating business model helps it well positioned to generate significant durable cash flow to fund growth and return capital to shareholders.

The company is due to release its third-quarter numbers before the bell on Tuesday, April 5, with analysts polled by Thomson Reuters estimating earnings of $1.19 per share on revenue of $1.84 billion. Analysts' estimate typically exclude certain special items.

The company projects third-quarter net earnings from continuing operations to be about $0.81 - $0.84 per share. On an adjusted basis, the company expects net earnings per share from continuing operations to be about $1.18 - $1.21.

Darden, the operator of the enduring Olive Garden chain, expects same-restaurant sales to increase about 6% for the third-quarter. On a comparable calendar basis, Darden expects same-restaurant sales to increase about 4% for the quarter.

For fiscal 2016, the company raised its same-restaurant sales growth forecast to 2.5% - 3.0% and adjusted net earnings per share outlook range to $3.25 - $3.35. The company's prior earnings per share expectation was in the range of $3.15 - $3.30. Darden said its updated guidance takes into account an expected reduction of earnings per share of about $0.08 related to the recently completed real estate transactions, excluding advisory fees and other one-time expenses.

Wall Street analysts have a consensus earnings estimate of $3.49 per share on revenue of $6.96 billion for fiscal 2016.

In the last quarter...

"We saw continued momentum this quarter, with all our brands once again posting positive same-restaurant sales growth and delivering meaningful margin improvement," said CEO Gene Lee. "These results reflect our continuous focus on operating great restaurants and leveraging our competitive advantages to drive sales and profitability."

The company's second-quarter net income was $43.2 million or $0.33 per share compared to a loss of $32.8 million or $0.26 per share in the prior year period.

Income from continuing operations amounted to $30.1 million or $0.23 per share versus a loss of $30.8 million or $0.24 per share in the same period of last year.

Adjusted earnings from continuing operations rose to $0.54 per share from $0.28 per share reported a year ago.

Sales totaled $1.61 billion for the second quarter, 3.2% higher than the previous year's sales of $1.56 billion.