Darden Q2 Review: Resilient Sales Despite Margin Pressure (Downgrade)
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Seeking Profits5.13K FollowersFollow5ShareSavePlay(10min)CommentsSummaryDarden Restaurants delivered resilient Q2 sales and reaffirmed guidance, despite margin pressure from elevated beef costs.LongHorn and Olive Garden posted strong same-store sales; beef-driven margin compression was most acute at LongHorn, but easing commodity pressures are expected.DRI maintains robust free cash flow, a secure 3.2% dividend, and a disciplined capital return strategy supported by a strong balance sheet.With shares near $200 and limited upside, I rate DRI as a "Hold," preferring entry below the low $190s. Joe Hendrickson/iStock Editorial via Getty Images While shares of Darden Restaurants, Inc. (DRI) have been a solid performer over the past year, gaining about 15%, the stock has struggled more recently, down over 13% from its high. There have been increasing fears about a slowdown in restaurant spending as consumersThis article was written bySeeking Profits5.13K FollowersFollowOver fifteen years of experience making contrarian bets based on my macro view and stock-specific turnaround stories to garner outsized returns with a favorable risk/reward profile. If you want me to cover a specific stock or have a question for an article, just let me know!Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.