Darden Earnings
Stronger quarter as expected, but the company did not give any forward-looking sales commentary (how much sales have slowed since the end of the quarter.) Beat by $0.09 and raised the low end of FY23 guidance by $0.15 on cost controls. We will not get 2024 guidance until the next quarter.
CEO Comments "I'm proud that we significantly exceeded the industry for both same-restaurant sales and traffic this quarter, outperforming even more on traffic than on sales. Our ability to invest in pricing below inflation over time provides strong value to our guests and reinforces the power of our strategy and our restaurant teams' commitment to being brilliant with the basics." How are sales trending since the end of the quarter?
Darden 3Q23 GAAP EPS of $2.34 beats by $0.09, and Revenue of $2.79B (+13.9% Y/Y) beats by $60M. Darden Restaurants reports Q3 EPS $2.34 vs. FS $2.25 Revenue $2.79B vs. FS $2.73B; comps 11.7% vs. FS 9.1%. Guidance (May 2023): EPS $7.85-$8.00 vs. prior guidance $7.60-$8.00 and FactSet $7.89; Revenue $10.45-$10.5B vs. prior guidance $10.3-$10.45B and FactSet $10.42B Comps +6.5-7.0% vs. prior guidance +5.0-6.5% and FactSet 5.9%
- With Knapp up 9.5% for the DEC-FEB time frame, OG and Longhorn gained market share; Olive Garden +12.3% vs. FS +9.5%; Longhorn +10.8% vs. FS +7.8%
CMG Next Investments
Chipotle announced on Wednesday two new investments through its venture fund. Both the investments made through Cultivate Next are aimed at helping the restaurant company further its mission and meet its ESG goals. Chipotle made a new investment in Local Line, which is described as a leading local food sourcing platform for regional food systems, serving farms, producers, food hubs, and food buyers. The venture aims to help food players digitize their operations and sell products. Chipotle's investment will also support the expansion of Local Line across the United States to procure local foods for Chipotle's restaurants. "Local Line exemplifies our mission to support local farmers and help grow their businesses so we can ensure the future of real food," said Chipotle Chief Technology Officer Curt Garner. CMG also invested in Zero Acre Farms, which is described as a cultured oil company focused on healthy, sustainable oils and fats. The venture aims to end the food industry's dependence on vegetable oils. "We believe companies like Zero Acre Farms have the power to change the world," noted Curt Garner.
KFC Nuggets
Important menu addition on par with the MCD "Chicken Big Mac" moment.
In 2022 tested nuggets made with the signature taste of KFC, and now the new Kentucky Fried Chicken Nuggets are making their way to KFC's permanent menu at participating locations. "Made with 100 percent white meat and hand-breaded with KFC's unique Original Recipe of 11 herbs and spices that made the fried chicken chain famous, the Kentucky Fried Chicken Nuggets can be enjoyed as a full meal, a snack on-the-go, complement to the bucket meal or even as an appetizer on the way home!" Starting March 27, it's making its way to KFC menus starting at $3.49 and is available as a 5-, 8-, 12- or 36-piece at participating restaurants nationwide. "Combo options are also available, featuring Secret Recipe Fries, a biscuit, and a medium drink." The new nuggets can be paired with any of your favorite KFC sauces, including KFC Sauce, Honey BBQ, Classic Ranch, Honey Mustard or Buffalo Ranch. go.
