Darden restaurant shares closed the day trading up almost 5% following this morning's mixed earnings report. The performance lands Darden at the top of the consumer discretionary sector performance for the day as the stock hit a new all-time high.
The company's results showed a miss for the company’s top line revenue results and same store sales estimates for the third quarter. Earnings per share were $2.80, in line with the analysts’ expectations.
While consumer sentiment continues to soften, Darden Restaurants remains optimistic. Management commented that changes in consumer sentiment have not translated to material changes in consumer spending. The company pointed out that where consumers spend is becoming more of the focus, making it critical for DRI to continue offering outsized value.
Darden's comments on their outlook excited investors, perhaps because of the company's ability to rally during the economy’s last struggle with inflation.
Darden stock was a relative strength performer during 2023 and 2024 as consumers searched for value options for their dining experience. The company’s Olive Garden chain was a standout during that drop in consumer confidence as diners chose value dining over higher grocery prices.
A similar pattern is taking place now as consumers continue to see prices rise on the grocery shelves.
Darden's brief trading above $200 today marked new highs for the stock but failed to break shares out of their two-month trading range.
DRI shares have traded as high as $200 and as low as $180 since the beginning of February. That range should be considered a healthy consolidation as the rest of the market (S&P 500) has lost more than 7%.
Darden shares are one of only 141 of the S&P 500 companies that are trading above their bullish 50-day moving averages in a long-term bull market trend.
Shares of Darden remain in a bull market trend with a price target of $250.
