DRI Stock Overview
Darden Restaurants, Inc., through its subsidiaries, owns and operates full-service restaurants in the United States and Canada.
Darden Restaurants Competitors
Price History & Performance
|Historical stock prices|
|Current Share Price||US$126.32|
|52 Week High||US$158.39|
|52 Week Low||US$110.96|
|1 Month Change||2.11%|
|3 Month Change||10.47%|
|1 Year Change||-19.01%|
|3 Year Change||8.50%|
|5 Year Change||56.28%|
|Change since IPO||1,843.39%|
Recent News & Updates
Return Trends At Darden Restaurants (NYSE:DRI) Aren't Appealing
There are a few key trends to look for if we want to identify the next multi-bagger. In a perfect world, we'd like to...
Darden Restaurants: Established Multi-Brand Restaurant Group Poised For Additional Growth
Summary Comprised of nine popular restaurant concepts, including Olive Garden. Scale provides some insulation from a recessionary environment. Industry-leading profit margins fueled by economies of scale related to fixed costs. We are initiating on DRI with a 1-year Price Target of $137/share and a Buy Rating. Investment Conclusion We like Darden Restaurants (DRI). The restaurant chain is the owner and operator of Olive Garden and LongHorn Steakhouse, and several additional full-service restaurant concepts in the U.S. and abroad. All of DRI's restaurant brands are well established and popular, as represented by significant sales growth, higher than industry average profit margins, and substantial average unit volumes. The considerable profit margins are driven by purchasing power given the breadth of the organization, and economies of scale related to lower marginal fixed costs/dollar of earnings, associated with corporate overheads, advertising, and technology. In addition, considering that DRI's target population spans a majority of demographic segments, customer traffic is sheltered to some extent during economic crises. Moreover, although the company has a significant presence in the contiguous U.S., the restaurant footprint is far from saturated, with substantial white space, as a considerable fraction of the DRI's restaurant groups are largely regional. In addition to organic growth, the firm grows through acquisitions. With a debt/adjusted EBITDA ratio of 1.8x, the company certainly has the wherewithal to immediately acquire a new business, if the opportunity presents itself. We view BJ's Restaurants (BJRI), with substantial revenue growth, but a weak margin profile, as a likely candidate, given that it's selling at a discount, pending a turnaround. Overall, business conditions described above indicate that DRI is well-positioned to evolve as an organization over the long-term. We are initiating on the firm with a 1-year Price Target of $137/share, based on our 10-year Discounted Cash Flow model. As the stock is trading at slightly below its intrinsic value, our Rating is a Buy. Investment Thesis Headquartered in Orlando Florida, DRI, is comprised of nine full-service restaurant chains, that encompass 1,867 company operated stores and 60 franchisee operated stores, located in 50 U.S. states and international territories. Based on size, economic characteristics, and the sub-section of full-service dining within which each brand operates, the business is divided into four segments: 1) Olive Garden 2) LongHorn Steakhouse 3) Fine Dining (composed of The Capital Grille and Eddie V's) and 4) Other Businesses (comprised of Cheddar's Scratch Kitchen, Yard House, Bahama Breeze, Seasons 52, The Capital Burger and franchise operations). During FY2022, DRI generated: $9.63 billion in total sales (+33.8% on a year-over-year basis), same-store sales growth of 30.9%, net income of ~$955 million (+51% relative to the prior year), and diluted earnings/share of $7.40 (+54.2% compared to FY2021). In addition, sales associated with Olive Garden, LongHorn Steakhouse, Fine Dining, and Other Businesses, expanded by 25.3%, 31.1%, 75.1%, and 46.4%. Average unit volumes associated with Olive Garden, LongHorn Steakhouse, Fine Dining, and Other Businesses, were $5.1 million, $4.4 million, $8.8 million, and $5.7 million. Profit margins were 22.1%, 17.6%, 21.3%, and 15.2%, for Olive Garden, LongHorn Steakhouse, Fine Dining, and Other Businesses. Given business dynamics, the predominant element surrounding the DRI story, is whether the company can sustain its considerable success over the near-term, particularly if an economic pullback unfolds. The secondary issue garnering investor attention, is related to DRI's long-term growth potential, as the business has expanded significantly over the past decade. Well-Positioned For Near-Term Growth. Best Positioned For An Economic Recession DRI outperformed during FY2022 on a year-over-year basis and compared to FY2019, with dramatic increases in revenues, gross profits, operating profits, net income, number of guests, and average unit volumes, across all of its restaurant concepts. Given strong trends evident during the initial portion of F1Q2023, the firm has guided to solid growth over FY2023, projecting total sales of between $10.2 billion to $10.4 billion, representing a year-over-year growth in a range of 6% to 8%, same-store sales growth of 4% to 6%, capital expenditure in a range of $500 million to $550 million, and commodity inflation of 6%. In regard to margins, DRI expects leverage in gross profits due to a decline in inflationary pressures, improvement in labor productivity, and reduced spending on new employee training. There are several key factors that will drive revenue upside in the period, including a potential dramatic increase in customer demand for Olive Garden, as initiatives, particularly the increased focus on a bottomless first course, higher national advertising spending, and efforts to improve off-premise sales as a fraction of total sales, gain traction. Further upside in sales will be fueled by our expectation that customers in large numbers are likely to return to DRI's urban fine-dining chains, which appeared to be on path to a solid recovery from the downturn experienced during the pandemic, with private dining and large parties, showing improvement over recent quarters. In addition, based on management commentary, company-wide digital sales, including delivery and take-out orders are likely to exceed levels observed during the viral outbreak. With regard to the possible unfolding of an economic recession, DRI is better positioned competitively, as cumulatively, its restaurant portfolio, addresses most of the economic classes, with guests ranging from the high-end, middle-income, and lower end. In that respect, it is important to note, that Cheddar's Scratch Kitchen, is the only one among the company's brands where check management by guests is evident, which might be driven by significant sales of a limited time value offer of T-bone steaks. In addition, if the economy were to pull-back, some decline in sales is likely to be offset by lower commodity prices, as every 1% of decrease in prices of supplies mitigates 2% of losses in customer traffic. Further, even if same-store sales growth is tepid, DRI plans to launch between 55 to 60 new restaurants, over FY2023, which will counter some of potential softness in customer demand. Overall, given the elements described above, we believe DRI is well positioned to not only sustain the significant progress its business generated over FY2022, but continue to experience near-term growth, even if an economic recession were to materialize. Significant Long-Term Growth On Cards Despite Established Profile Although, on a long-term basis, same-store sales are likely to expand substantially, major growth will be derived from dramatic expansion of the restaurant footprint and acquisitions of well-established restaurant groups. In that regard, granted, domestically, Olive Garden with 887 restaurants and LongHorn Steakhouse with 564 restaurants appear sufficiently penetrated. However, DRI's additional brands remain largely regional, with small footprint sizes. In that context, Cheddar's Scratch Kitchen has 176 restaurants, Yard House has 85, The Capital Grille has 62, Season 52 has 45, Bahama Breeze has 43, Eddie V's has 28, and The Capital Burger has 3 restaurants. In addition, restaurants associated with LongHorn Steakhouse and Bahama Breeze are limited to the East Coast, The Capital Grille, Yard House, The Capital Burger, and Eddie V's have a presence only in major metropolitan areas, and Cheddar's Scratch Kitchen restaurants are located in Texas, the mid-west, and the mid-Atlantic, reflecting a solid opportunity for significant geographic diversification. In addition, given the substantial popularity of Olive Garden and LongHorn Steakhouse, DRI continues to rapidly expand footprints, associated with the restaurants concepts. With respect to M&A, five of DRI's nine restaurant concepts are takeouts. The company acquired The Capital Grille and LongHorn Steakhouse in 2007, Eddie V's in 2011, Yard House in 2012, and Cheddar's Scratch Kitchen in 2017. We believe that BJ's Restaurants is a likely strong acquisition target. Our conviction that the brand represents an appropriate addition to DRI's restaurant portfolio is based on several elements, including that DRI lacks a Sports Bar concept, BJRI's sales have recovered strongly from the pandemic, and strategies are being implemented to drive margin growth to pre-COVID-19 levels. Given that the Brew House is in turnaround mode, it is considerably undervalued on a relative basis, further enhancing its appeal as a takeout target. Moreover, BJRI carries insignificant debt and is trading at a LTM EV/EBITDA multiple of 14.2x. DRI acquired Cheddar's Scratch Kitchen (its most recent acquisition) for a LTM EV/EBITDA multiple of 10.4x.
Here's Why We Think Darden Restaurants (NYSE:DRI) Is Well Worth Watching
Investors are often guided by the idea of discovering 'the next big thing', even if that means buying 'story stocks...
|DRI||US Hospitality||US Market|
Return vs Industry: DRI exceeded the US Hospitality industry which returned -30.3% over the past year.
Return vs Market: DRI exceeded the US Market which returned -21.5% over the past year.
|DRI Average Weekly Movement||4.5%|
|Hospitality Industry Average Movement||7.3%|
|Market Average Movement||6.9%|
|10% most volatile stocks in US Market||15.6%|
|10% least volatile stocks in US Market||2.8%|
Stable Share Price: DRI is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 5% a week.
Volatility Over Time: DRI's weekly volatility (5%) has been stable over the past year.
About the Company
Darden Restaurants, Inc., through its subsidiaries, owns and operates full-service restaurants in the United States and Canada. As of May 29, 2022, it owned and operated 1,867 restaurants, which included 884 under the Olive Garden brand, 546 under the LongHorn Steakhouse brand name, 172 under the Cheddar's Scratch Kitchen brand, 85 under the Yard House brand name, 62 under The Capital Grille brand, 45 under the Seasons 52 brand name, 42 under the Bahama Breeze brand, 28 under the Eddie V’s Prime Seafood brand name, and 3 under the Capital Burger brand; and franchised 60 restaurants comprising 35 under the Olive Garden brand, 18 under the LongHorn Steakhouse brand name, 4 under the Cheddar's Scratch Kitchen brand, 2 under The Capital Grille brand name, and 1 under the Bahama Breeze brand Darden Restaurants, Inc. was founded in 1968 and is based in Orlando, Florida.
Darden Restaurants Fundamentals Summary
|DRI fundamental statistics|
Is DRI overvalued?See Fair Value and valuation analysis
Earnings & Revenue
|DRI income statement (TTM)|
|Cost of Revenue||US$7.83b|
Last Reported Earnings
Aug 28, 2022
Next Earnings Date
|Earnings per share (EPS)||7.48|
|Net Profit Margin||9.38%|
How did DRI perform over the long term?See historical performance and comparison
3.8%Current Dividend Yield
Does DRI pay a reliable dividends?See DRI dividend history and benchmarks
|Darden Restaurants dividend dates|
|Ex Dividend Date||Oct 06 2022|
|Dividend Pay Date||Nov 01 2022|
|Days until Ex dividend||5 days|
|Days until Dividend pay date||31 days|
Does DRI pay a reliable dividends?See DRI dividend history and benchmarks
Is DRI undervalued compared to its fair value, analyst forecasts and its price relative to the market?
Valuation Score 5/6
Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Key Valuation Metric
Which metric is best to use when looking at relative valuation for DRI?
Other financial metrics that can be useful for relative valuation.
|What is DRI's n/a Ratio?|
Price to Earnings Ratio vs Peers
How does DRI's PE Ratio compare to its peers?
|DRI PE Ratio vs Peers|
|Company||PE||Estimated Growth||Market Cap|
YUMC Yum China Holdings
DPZ Domino's Pizza
QSR Restaurant Brands International
YUM Yum! Brands
DRI Darden Restaurants
Price-To-Earnings vs Peers: DRI is good value based on its Price-To-Earnings Ratio (16.9x) compared to the peer average (22.5x).
Price to Earnings Ratio vs Industry
How does DRI's PE Ratio compare vs other companies in the US Hospitality Industry?
Price-To-Earnings vs Industry: DRI is good value based on its Price-To-Earnings Ratio (16.9x) compared to the US Hospitality industry average (17.3x)
Price to Earnings Ratio vs Fair Ratio
What is DRI's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.
|Current PE Ratio||16.9x|
|Fair PE Ratio||31.1x|
Price-To-Earnings vs Fair Ratio: DRI is good value based on its Price-To-Earnings Ratio (16.9x) compared to the estimated Fair Price-To-Earnings Ratio (31.1x).
Share Price vs Fair Value
What is the Fair Price of DRI when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.
Below Fair Value: DRI ($126.32) is trading below our estimate of fair value ($181.7)
Significantly Below Fair Value: DRI is trading below fair value by more than 20%.
Analyst Price Targets
What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?
Analyst Forecast: Target price is less than 20% higher than the current share price.
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How is Darden Restaurants forecast to perform in the next 1 to 3 years based on estimates from 26 analysts?
Future Growth Score2/6
Future Growth Score 2/6
Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Forecasted annual earnings growth
Earnings and Revenue Growth Forecasts
Analyst Future Growth Forecasts
Earnings vs Savings Rate: DRI's forecast earnings growth (7% per year) is above the savings rate (1.9%).
Earnings vs Market: DRI's earnings (7% per year) are forecast to grow slower than the US market (14.7% per year).
High Growth Earnings: DRI's earnings are forecast to grow, but not significantly.
Revenue vs Market: DRI's revenue (4.7% per year) is forecast to grow slower than the US market (7.6% per year).
High Growth Revenue: DRI's revenue (4.7% per year) is forecast to grow slower than 20% per year.
Earnings per Share Growth Forecasts
Future Return on Equity
Future ROE: DRI's Return on Equity is forecast to be very high in 3 years time (46.8%).
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How has Darden Restaurants performed over the past 5 years?
Past Performance Score4/6
Past Performance Score 4/6
Growing Profit Margin
Earnings vs Industry
Historical annual earnings growth
Earnings and Revenue History
Quality Earnings: DRI has high quality earnings.
Growing Profit Margin: DRI's current net profit margins (9.4%) are lower than last year (10.4%).
Past Earnings Growth Analysis
Earnings Trend: DRI's earnings have grown by 5.6% per year over the past 5 years.
Accelerating Growth: DRI's earnings growth over the past year (11.1%) exceeds its 5-year average (5.6% per year).
Earnings vs Industry: DRI earnings growth over the past year (11.1%) underperformed the Hospitality industry 36.2%.
Return on Equity
High ROE: DRI's Return on Equity (44.4%) is considered outstanding.
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How is Darden Restaurants's financial position?
Financial Health Score4/6
Financial Health Score 4/6
Short Term Liabilities
Long Term Liabilities
Financial Position Analysis
Short Term Liabilities: DRI's short term assets ($941.0M) do not cover its short term liabilities ($1.8B).
Long Term Liabilities: DRI's short term assets ($941.0M) do not cover its long term liabilities ($6.1B).
Debt to Equity History and Analysis
Debt Level: DRI's net debt to equity ratio (25.1%) is considered satisfactory.
Reducing Debt: DRI's debt to equity ratio has reduced from 45.7% to 43.4% over the past 5 years.
Debt Coverage: DRI's debt is well covered by operating cash flow (167.8%).
Interest Coverage: DRI's interest payments on its debt are well covered by EBIT (15.3x coverage).
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What is Darden Restaurants's current dividend yield, its reliability and sustainability?
Dividend Score 4/6
Cash Flow Coverage
Current Dividend Yield
Upcoming Dividend Payment
Dividend Yield vs Market
|Darden Restaurants Dividend Yield vs Market|
|Company (Darden Restaurants)||3.8%|
|Market Bottom 25% (US)||1.7%|
|Market Top 25% (US)||4.7%|
|Industry Average (Hospitality)||2.0%|
|Analyst forecast in 3 Years (Darden Restaurants)||4.2%|
Notable Dividend: DRI's dividend (3.83%) is higher than the bottom 25% of dividend payers in the US market (1.66%).
High Dividend: DRI's dividend (3.83%) is low compared to the top 25% of dividend payers in the US market (4.7%).
Stability and Growth of Payments
Stable Dividend: DRI's dividend payments have been volatile in the past 10 years.
Growing Dividend: DRI's dividend payments have increased over the past 10 years.
Earnings Payout to Shareholders
Earnings Coverage: With its reasonable payout ratio (62%), DRI's dividend payments are covered by earnings.
Cash Payout to Shareholders
Cash Flow Coverage: With its reasonable cash payout ratio (56.1%), DRI's dividend payments are covered by cash flows.
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How experienced are the management team and are they aligned to shareholders interests?
Average management tenure
Rick Cardenas (54 yo)
Mr. Ricardo Cardenas, also known as Rick, serves as President at Darden Restaurants, Inc. since January 4, 2021 and its Chief Executive Officer and Director since May 30, 2022 and served as its Chief Opera...
CEO Compensation Analysis
|Rick Cardenas's Compensation vs Darden Restaurants Earnings|
|Date||Total Comp.||Salary||Company Earnings|
|Aug 28 2022||n/a||n/a|
|May 29 2022||US$5m||US$796k|
|Feb 27 2022||n/a||n/a|
|Nov 28 2021||n/a||n/a|
|Aug 29 2021||n/a||n/a|
|May 30 2021||US$4m||US$745k|
|Feb 28 2021||n/a||n/a|
|Nov 29 2020||n/a||n/a|
|Aug 30 2020||n/a||n/a|
|May 31 2020||US$3m||US$686k|
|Feb 23 2020||n/a||n/a|
|Nov 24 2019||n/a||n/a|
|Aug 25 2019||n/a||n/a|
|May 26 2019||US$3m||US$687k|
|Feb 24 2019||n/a||n/a|
|Nov 25 2018||n/a||n/a|
|Aug 26 2018||n/a||n/a|
|May 27 2018||US$3m||US$614k|
|Feb 25 2018||n/a||n/a|
|Nov 26 2017||n/a||n/a|
|Aug 27 2017||n/a||n/a|
|May 28 2017||US$3m||US$560k|
|Feb 26 2017||n/a||n/a|
|Nov 27 2016||n/a||n/a|
|Aug 28 2016||n/a||n/a|
|May 29 2016||US$2m||US$475k|
Compensation vs Market: Rick's total compensation ($USD4.71M) is below average for companies of similar size in the US market ($USD13.04M).
Compensation vs Earnings: Rick's compensation has increased by more than 20% in the past year.
Experienced Management: DRI's management team is seasoned and experienced (6.9 years average tenure).
Experienced Board: DRI's board of directors are considered experienced (7.7 years average tenure).
Who are the major shareholders and have insiders been buying or selling?
Insider Trading Volume
Insider Buying: DRI insiders have only sold shares in the past 3 months.
Recent Insider Transactions
|02 Aug 22||SellUS$5,168,253||Eugene Lee||Individual||41,442||US$125.29|
|15 Jul 22||SellUS$66,355||Nana Mensah||Individual||567||US$117.03|
|28 Jun 22||BuyUS$1,200,000||Timothy Wilmott||Individual||10,000||US$120.00|
|28 Mar 22||BuyUS$248,354||Juliana Chugg||Individual||1,925||US$129.02|
|Owner Type||Number of Shares||Ownership Percentage|
|State or Government||54,304||0.04%|
Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.
|Ownership||Name||Shares||Current Value||Change %||Portfolio %|
Darden Restaurants, Inc.'s employee growth, exchange listings and data sources
- Name: Darden Restaurants, Inc.
- Ticker: DRI
- Exchange: NYSE
- Founded: 1968
- Industry: Restaurants
- Sector: Consumer Services
- Implied Market Cap: US$15.484b
- Shares outstanding: 122.58m
- Website: https://www.darden.com
Number of Employees
- Darden Restaurants, Inc.
- 1000 Darden Center Drive
- United States
|Ticker||Exchange||Primary Security||Security Type||Country||Currency||Listed on|
|DRI||NYSE (New York Stock Exchange)||Yes||Common Stock||US||USD||May 1995|
|DDN||DB (Deutsche Boerse AG)||Yes||Common Stock||DE||EUR||May 1995|
|0I77||LSE (London Stock Exchange)||Yes||Common Stock||GB||USD||May 1995|
|D1RI34||BOVESPA (Bolsa de Valores de Sao Paulo)||BDR EACH 4 REPR 1 COM||BR||BRL||Jan 2020|
Company Analysis and Financial Data Status
|Data||Last Updated (UTC time)|
|Company Analysis||2022/09/30 00:00|
|End of Day Share Price||2022/09/30 00:00|
Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.