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Company: Darden Restaurants (DRI)
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11%
agree
9 votes

  Largest U.S. Restaurants See Decline in Growth

Top Contributor: Rashad Badr | Created when NYSE:DRI was $36.02 | Edit | History

Domestic sales growth at the 500 largest U.S. restaurant chains fell to 3.4 percent in 2008, a decrease from 5 percent the previous year, Technomic Inc, a foodservice consultant, said on Monday.

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29%
agree
17 votes

  Stock down and consumer spending is under pressure

Top Contributor: Greg Feirman | Created when NYSE:DRI was $29.29 | Edit | History

Darden Restaurants (DRI), owner of The Olive Tree and Red Lobster, lowered their full year forecast.

They lowered same store sales expectations for fiscal year 2009 from 2% growth to 0%-1% growth, revenue growth from 14%-15% to 12%-13% and EPS growth, exluding items, from 9%-10% to 0%-5%.

The stock is down 13% on heavy volume. Just another concrete piece of evidence that consumer spending is under pressure. The stock is cheap here at about 10 times earnings ($28 a share/$2.74 EPS FY 2008)

The economy is getting tighter with more expensive food costs, higher oil prices, higher gas prices, etc. All this means that people will have less discretionary income to spend at restaurants, such as Darden's various restaurants.

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18%
agree
11 votes

  Same Store Sales Expected to Decrease Through 2009

Top Contributor: Morgan Alcalay | Created when NYSE:DRI was $17.50 | Edit | History

Analysts have lowered their forecasts for same-store sales to a 3.9% decrease. This factored into a decrease of forecast 2009 earnings per share from $2.74 to $2.05. As consumers discretionary income falls to higher debt payments and costs of living, they will spend less eating out at restaurants, such as those owned by Darden.

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