Darden Restaurants (DRI) Earnings Expected to Grow: Should You Buy?

Darden Restaurants is slated to report results for the quarter ended August 2024 on Sept. 19 with consensus estimates at $1.83 EPS (up 2.8% year-over-year) and $2.8 billion revenue (up 2.6%); the consensus EPS estimate has been revised up 0.6% over the past 30 days. Zacks' Earnings ESP is slightly negative at -0.27% because the Most Accurate Estimate sits below the consensus and the stock carries a Zacks Rank #3, implying limited odds of an earnings surprise despite Darden beating estimates in three of the last four quarters (most recently by +1.15%); near-term stock moves will likely depend as much on management’s forward commentary as on the headline beat/miss.

Analysis

Darden Restaurants (DRI) is slated to report results for the quarter ended August 2024 on September 19; Zacks consensus calls for $1.83 EPS (a year-over-year increase of +2.8%) and $2.8 billion in revenue (up +2.6%), and the consensus EPS estimate has been revised up 0.6% over the past 30 days.

The Zacks Most Accurate Estimate now sits below the consensus, producing an Earnings ESP of -0.27%, while the stock carries a Zacks Rank of #3; because Zacks finds negative ESP readings and a neutral rank weaken the predictive power for an earnings beat, the likelihood of a positive EPS surprise appears constrained. Darden has beaten consensus in three of the last four quarters, most recently by +1.15% (actual $2.65 vs expected $2.62), which moderates but does not eliminate downside risk.

Near-term stock moves will likely be driven as much by management’s discussion of business conditions and forward guidance as by the headline EPS/revenue print; the article’s sentiment signals are mildly negative (sentiment score -0.22) with a modest market-impact score (0.28), implying limited expected upside absent reassuring commentary or upward estimate revisions.

Key Decisions for Investors

• Avoid initiating large new long positions into the September 19 earnings release given the negative Earnings ESP (-0.27%) and neutral Zacks Rank #3, as upside surprise probability appears limited
• If already long, consider trimming position size or hedging short-term downside (e.g., protective puts) to guard against an earnings miss given modest consensus growth (+2.8% EPS) and recent downward revisions to the Most Accurate Estimate
• Monitor management’s earnings-call commentary and any last-minute revisions closely—material improvement in guidance or a shift to a positive Earnings ESP should prompt reassessment of risk/reward
• Wait for the print and call to reassess conviction, prioritizing forward-looking commentary on business conditions and guidance rather than the headline beat/miss alone