Before Friday’s opening bell, Darden Restaurant (DRI) released its third quarter financial results. Here’s what the results mean for mutual fund investors.
Inside DRI’s Results
Earnings
The company reported earnings of $133.8 million, or $1.05 per share, up from $109.7 million, or 82 cents per share, a year ago. Adjusted earnings wee 99 cents, above analysts’ view of 84 cents.
Revenue
Sales increased 6.9% to $1.73 billion from $1.62 billion. Analysts expected to see revenue of $1.72 billion.
Outlook
For FY2015, the company expects to see EPS between $1.50 and $1.53. Adjusted EPS is expected to be between $2.45 and $2.48. Analysts expect to see FY2015 EPS of $2.30.
Olive Garden Pressures Darden’s Results
In the most recent quarter, Olive Garden comparable store sales increased for the first time since November 2013. While the increase may be a sign of a turnaround, the restaurant, which accounts for 55% of Darden’s total restaurants, has been dragging at DRI’s bottom line.
Below is an overview of DRI’s most recent comparable store sales growth by restaurant.
| Restaurant | Comps |
|---|---|
| Olive Garden | 2.2% |
| LongHorn Steakhouse | 5.4% |
| Capital Grille | 6.1% |
| Bahama Breeze | 3.2% |
Mutual Funds to Watch
The funds listed below may be a good option for investors seeking exposure to Darden. The three funds below currently hold the largest stakes in the company.
| Symbol | Mutual Fund | Stake |
|---|---|---|
| LCEAX | Invesco Diversified Dividend | 2.21% |
| VMCIX | Vanguard Mid Cap Index | 1.77% |
| VTSMX | Vanguard Total Stock Mkt Idx | 1.67% |
The Bottom Line
The funds above offer investors a stake in DRI, while remaining diversified. Investors interested in DRI may also be interested in Yum! Brands (YUM) and Brinker International (EAT).
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