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Showing posts with label Darden. Show all posts
Showing posts with label Darden. Show all posts
Wednesday, September 26, 2012
Investopedia: Improved Traffic And Menu Revamp Optimism Boosting Darden
Sit-down restaurants have come back into favor over the past year or so, and Darden (NYSE:DRI)
has gone along for the ride ... even though company growth really
hasn't improved all that much. Darden remains a strong player in the
industry, with two of the largest concepts (Olive Garden and Red
Lobster) and sustained double-digit returns on capital. Although Darden
shares don't look like much of a bargain today, the market may not be
through with it yet, as menu revamps could spur better traffic and
earnings.
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Wednesday, June 27, 2012
Investopedia: Darden Hits A Dry Patch
As the economy continues to wobble along in the U.S., economically
sensitive businesses like restaurants continue to face some significant
challenges. Newer concepts like BJ's Restaurants (Nasdaq:BJRI) and Buffalo Wild Wings (Nasdaq:BWLD)
continue to bring in the patrons, but many established chains are
having to work harder and harder for even minor improvements in comp-store growth.
That puts Darden Restaurants (NYSE:DRI) in a tough spot. Darden is definitely a well-run veteran restaurant operator, but the company's core restaurants like Olive Garden and Red Lobster are hardly novel to the restaurant going public. With same-store sales coming in a little weak for the fiscal fourth quarter and the stock sporting a fairly robust multiple, it seems like this is a stock that is going to be stuck for at least a little while longer.
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That puts Darden Restaurants (NYSE:DRI) in a tough spot. Darden is definitely a well-run veteran restaurant operator, but the company's core restaurants like Olive Garden and Red Lobster are hardly novel to the restaurant going public. With same-store sales coming in a little weak for the fiscal fourth quarter and the stock sporting a fairly robust multiple, it seems like this is a stock that is going to be stuck for at least a little while longer.
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Wednesday, September 28, 2011
Investopedia: Should Darden Stand Pat Or Spread Out?
The largest casual dining operator in the world, Darden Restaurants (NYSE:DRI), warned that it's fiscal first quarter was going to disappoint, and disappoint it did. There are bigger questions about this company than just why traffic at Olive Garden was weak this quarter. Should the company get more aggressive and add concepts in what is a weak restaurant market, or focus on maximizing what it has? Perhaps even more pertinent to investors, are Wall Street's sell-side analysts expecting too much in their models and dooming the stock to underperformance?
A Sluggish Start to the Year
The consumer spending environment is still very price-conscious and that is hurting casual restaurant chains like Darden. With companies like Five Guys, Chipotle (NYSE:CMG), and McDonald's (NYSE:MCD) offering improved products and other quick-service rivals like Yum! Brands (NYSE:YUM) offering low prices, it is harder to draw traffic to stores with average checks in the high teens.
While Darden reported revenue growth of over 7% this quarter, core comp sales were up less than 3% while speciality comps were up a bit more than 5%. Growth was weakest at the flagship Olive Garden, where comps fell almost 3% (on lower traffic) and overall sales rose less than 1%. While Red Lobster and and LongHorn were stronger on a reported basis (each up 12%, with comps up 10.7% and 4.8% respectively), both benefited from heavy promotional activity that gives a misleading picture of real traffic.
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A Sluggish Start to the Year
The consumer spending environment is still very price-conscious and that is hurting casual restaurant chains like Darden. With companies like Five Guys, Chipotle (NYSE:CMG), and McDonald's (NYSE:MCD) offering improved products and other quick-service rivals like Yum! Brands (NYSE:YUM) offering low prices, it is harder to draw traffic to stores with average checks in the high teens.
While Darden reported revenue growth of over 7% this quarter, core comp sales were up less than 3% while speciality comps were up a bit more than 5%. Growth was weakest at the flagship Olive Garden, where comps fell almost 3% (on lower traffic) and overall sales rose less than 1%. While Red Lobster and and LongHorn were stronger on a reported basis (each up 12%, with comps up 10.7% and 4.8% respectively), both benefited from heavy promotional activity that gives a misleading picture of real traffic.
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Monday, July 4, 2011
Investopedia: Can Darden Go 3 For 3?
Not many companies do one thing very well, and precious few manage to do two things well. So maybe it is a little bit greedy to look for Darden Restaurants (NYSE:DRI) to develop a third restaurant chain to match the performance of Olive Garden and Red Lobster. Still, greedy though it may be, Wall Street has a hard core addiction to growth and Darden is going to need to find some new lever of performance, be it a third leading concept or global expansion, or risk never seeing full fair value on the shares.
A Solid End to the Year
Darden did not post any major surprises for the fiscal fourth quarter. Sales rose a bit less than 7%, with same-store growth of just over 2% in its core restaurant group. Longhorn Steakhouse led the way with 6%, Red Lobster posted almost 4% same-store growth due in part to a promotion, and Olive Garden was a disappointment with flat same-store performance. Darden also reported better than 5% same-store growth from its specialty group (which includes Capital Grille, Bahama Breeze and Seasons 52).
Even though there is rampant talk everywhere about food cost inflation, Darden managed to maintain pretty healthy margins. Gross margin ticked up about 40 basis points, while adjusted operating income rose more 18% and operating margin increased by 60 basis points.
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A Solid End to the Year
Darden did not post any major surprises for the fiscal fourth quarter. Sales rose a bit less than 7%, with same-store growth of just over 2% in its core restaurant group. Longhorn Steakhouse led the way with 6%, Red Lobster posted almost 4% same-store growth due in part to a promotion, and Olive Garden was a disappointment with flat same-store performance. Darden also reported better than 5% same-store growth from its specialty group (which includes Capital Grille, Bahama Breeze and Seasons 52).
Even though there is rampant talk everywhere about food cost inflation, Darden managed to maintain pretty healthy margins. Gross margin ticked up about 40 basis points, while adjusted operating income rose more 18% and operating margin increased by 60 basis points.
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Wednesday, May 11, 2011
Investopedia: Sysco Humming Along
Food distributor Sysco (NYSE:SYY) is never flashy, but the company has an enviable track record of market share growth and consistent free cash flow growth. That makes it a staple name on lists of quality dividend growth stocks and conservative growth ideas. What's more, it is not a bad way to play what could prove to be many years of inflation pressure. (To help you build a dividend portfolio, read Build A Dividend Portfolio That Grows With You.)
Solid Third Quarter Performance
Sysco reported sales growth of just over 9% for its fiscal third quarter, quite a bit better than the consensus expectation of just under 6%. Growth was clearly fueled by food inflation of more than 5%; case volume growth was about 2% and real sales growth was just under 3%. That is relatively consistent with the customer traffic patterns being reported by major U.S. restaurant chains like McDonald's (NYSE:MCD) and Brinker (NYSE:EAT), so there is not much reason to think that Sysco is losing share.
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Solid Third Quarter Performance
Sysco reported sales growth of just over 9% for its fiscal third quarter, quite a bit better than the consensus expectation of just under 6%. Growth was clearly fueled by food inflation of more than 5%; case volume growth was about 2% and real sales growth was just under 3%. That is relatively consistent with the customer traffic patterns being reported by major U.S. restaurant chains like McDonald's (NYSE:MCD) and Brinker (NYSE:EAT), so there is not much reason to think that Sysco is losing share.
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Friday, April 8, 2011
Investopedia: Stocks With Dividends And Growth
Sometimes growth stocks and income-producing stocks are arrayed against each other as some sort of "bubblegum vs. potato chips" argument. In reality, though, investors can usually find a pretty healthy menu of choices among companies that not only return a meaningful dividend to shareholders, but also have growth prospects strong enough to drive future capital appreciation. Although an investor should always hold a diversified portfolio to minimize company-specific risks, a selection of these stocks could offer a bit of the best of both worlds.
Healthcare
Abbott Labs (NYSE:ABT) is a frequent-flier in articles about quality companies, dividend-paying companies, quality dividend-paying companies, consistent dividend-payers, and so on. Well, there's a good reason for that - Abbott is a legit star when it comes to sharing its success with its owners. On top of that, Abbott has an uncanny knack for finding breakaway winners just when analysts sour on the company's future growth prospects (first Humira, then drug-coated stents). Abbott does have some near-threats to its growth, but it would seem unwise to assume the worst for this proven healthcare giant. (For more, see Healthy Dividend-Growth Ideas In Healthcare.)
Finance
Given that it has been around so long, it may be hard to think of M&T Bank (NYSE:MTB) as a "growth" candidate. That said, the company still operates in only a relatively small geographic part of the company and there is certainly room to grow by acquisition and/or superior execution. This is a well-run bank that offers a solid dividend and above-average long-term growth prospects.
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Healthcare
Abbott Labs (NYSE:ABT) is a frequent-flier in articles about quality companies, dividend-paying companies, quality dividend-paying companies, consistent dividend-payers, and so on. Well, there's a good reason for that - Abbott is a legit star when it comes to sharing its success with its owners. On top of that, Abbott has an uncanny knack for finding breakaway winners just when analysts sour on the company's future growth prospects (first Humira, then drug-coated stents). Abbott does have some near-threats to its growth, but it would seem unwise to assume the worst for this proven healthcare giant. (For more, see Healthy Dividend-Growth Ideas In Healthcare.)
Finance
Given that it has been around so long, it may be hard to think of M&T Bank (NYSE:MTB) as a "growth" candidate. That said, the company still operates in only a relatively small geographic part of the company and there is certainly room to grow by acquisition and/or superior execution. This is a well-run bank that offers a solid dividend and above-average long-term growth prospects.
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Wednesday, July 14, 2010
Financial Edge - Why There Are Always Stocks Worth Owning
Buy and hold? Sell in May and go away? Bull market, bear market or lambs-to-the-abattoir market?
You will find no shortage of financial commentators trying to scare you out of the market and out of your holdings. Their advice often comes with the candy coating that "they are just trying to help you avoid losses", but there is poison within the message. Sure, it is painful to see your investments decline in value and there is rarely any good reason to hang on to a failed idea, but if you worry too much about trying to time the market, you will sell yourself out of any chance of reaping long-term gains. (For related reading, check out 4 Ways To Weather An Economic Storm.)
In other words, no matter what the economy looks like, there are always stocks worth owning.
To continue to the full piece, please click below:
http://financialedge.investopedia.com/financial-edge/0710/There-Are-Always-Stocks-Worth-Owning.aspx
You will find no shortage of financial commentators trying to scare you out of the market and out of your holdings. Their advice often comes with the candy coating that "they are just trying to help you avoid losses", but there is poison within the message. Sure, it is painful to see your investments decline in value and there is rarely any good reason to hang on to a failed idea, but if you worry too much about trying to time the market, you will sell yourself out of any chance of reaping long-term gains. (For related reading, check out 4 Ways To Weather An Economic Storm.)
In other words, no matter what the economy looks like, there are always stocks worth owning.
To continue to the full piece, please click below:
http://financialedge.investopedia.com/financial-edge/0710/There-Are-Always-Stocks-Worth-Owning.aspx
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