Darden Restaurants (NYSE: DRI), a specialist in the full-service dining restaurant chain, is set to announce its fiscal fourth-quarter earnings (ending in May) on Friday, June 20, 2025, with analysts estimating earnings of $2.94 per share on $3.25 billion in revenue. This would indicate a 14% year-over-year increase in earnings and a 10% rise in sales compared to the previous year’s figures of $2.58 per share and $2.96 billion in revenue. Historically, DRI stock has risen 55% of the time following earnings releases, with a median one-day increase of 5.8% and a maximum observed rise of 15%.
The fiscal 2025 third quarter was characterized by significant financial achievements for Darden. Total sales increased by 6.2% to reach $3.2 billion, mainly driven by acquisitions and new restaurant openings. The purchase of Chuy’s contributed positively to the brand portfolio, enhancing overall revenue. Same-restaurant sales improved by 0.7%, with LongHorn Steakhouse achieving a notable 2.6% increase. While Olive Garden experienced a modest growth of 0.6%, the Fine Dining sector saw a decline of 0.8%. For the entire year, Darden reaffirmed its revenue forecast of $12.1 billion and adjusted its earnings outlook from continuing operations to a range of $9.45 to $9.52 per share. The company boasts a current market capitalization of $25 billion. Over the past twelve months, its revenue stood at $12 billion, operating profit reached $1.4 billion, and net income totaled $1.1 billion.
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Darden Restaurants’ Historical Odds Of Positive Post-Earnings Return
A few insights regarding one-day (1D) post-earnings returns:
- Over the last five years, there are 20 earnings data points recorded, with 11 positive and 9 negative one-day (1D) returns noted. In total, positive 1D returns were observed approximately 55% of the time.
- However, this percentage drops to 42% when considering data from the last 3 years instead of 5.
- The median of the 11 positive returns is 5.8%, while the median of the 9 negative returns is -2.6%.
Additional information regarding the observed 5-Day (5D) and 21-Day (21D) returns following earnings can be found in the table summary below.
Relationship Between 1D, 5D, and 21D Historical Returns
A strategy that carries relatively lower risk (although less effective with low correlation) is to analyze the correlation between short-term and medium-term returns following earnings, identify the pair with the strongest correlation, and initiate the relevant trade. For instance, if 1D and 5D exhibit the highest correlation, a trader could take a “long” position for the subsequent 5 days if the 1D post-earnings return is positive. Here is some correlation data derived from both a 5-year and a more recent 3-year history. Please note that the correlation 1D_5D represents the connection between 1D post-earnings returns and subsequent 5D returns.
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