DRI – LET EM RIP

DRI is going to report FY 2Q09 EPS on Friday and we don’t think things are as bad as people think. See our DRI post titled “DRI - Estimates May Have Gone Down Too Much” from November 26.

I just want to reiterate what I think could come out of the EPS call:

(1) Street consensus EPS numbers are too low for the company….
(2) Same-store sales trends are better than consensus (part of the reason why EPS estimates are too low).
(3) The company will have positive commentary about the cost side of the equation, especially seafood, chicken and wheat costs.
(4) Industry same-store sales trends in November, while still bad, are less bad than October.
(5) FY 2Q08 was such a disaster

We know that there will likely never be another national Casual Dining chain that can compete against Red Lobster or the Olive Garden. What is that worth? I bet more than 9x EPS….

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