Darden Restaurants Offers Weak Q2 Profit View; Cuts 2013 Forecast; Shares Plunge (DRI)
Full service restaurant chain operator Darden Restaurants, Inc. (DRI) on Tuesday provided a much weaker-than-expected fiscal second quarter profit outlook and lowered its full-year estimates, sending its shares tumbling lower in premarket trading.
The Orlando-based operator of Red Lobster and Olive Garden restaurants forecast second earnings from continuing operations of 25 to 26 cents per share, which would badly miss Wall Street’s view of 47 cents. Darden’s estimate includes a 5 cent per share negative impact from closing costs associated with its acquisition of the Yard House bar/restaurant chain, as well as a 1 cent impact from Superstorm Sandy.
DRI also expects second quarter same-store sales to fall 2.7% across its properties.
For the full year, the company lowered its earnings outlook to a range of $3.29 to $3.49 per share. Analysts are currently looking for $3.88 per share for the year.
Darden Restaurants shares fell $4.52, or -8.6%, in premarket trading Tuesday.
The Bottom Line
Shares of Darden Restaurants (DRI) have a 3.82% dividend yield, based on last night’s closing stock price of $52.42. The stock has technical support in the $46-$48 price area. If the shares can firm up, we see overhead resistance around the $54 price level.
Darden Restaurants, Inc. (DRI) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.4 out of 5 stars.
Get FREE Dividend Tips, Updates & MoreWe respect your privacy
- Powerful dividend insights sent every weekday morning
- Gain instant access to actionable investing tips
- Strategically grow your portfolio’s profitability