Jim Cramer - Mad Money Darden Restaurants DRI-N BUY Aug 21, 2023

They report Thursday and will reveal if people will still spend a lot of money to dine out. He likes DRI but not enough to buy it.

They report Friday. Listen to what they say about consumer demand and inflation. This is key and could pressure shares.

Trades at 18x PE and pays a 3% dividend yield. True, it's in a crowded space, but DRI makes money.

Expectations are high, so they need to come in with a strong quarter. The consumer is resilient and business is doing well.

They report Thursday. Analysts have been downgrading it and shares are down from their peak. It can go lower if they report their price hikes are hurting business.

They report Thursday. A lot will depend on their Olive Garden business, their largest, and it could surprise, but he much prefers Sweet Green and Cava.

It reports Thursday. Olive Garden still drives this company, but the street is focused on the Texas Roadhouse and Brinker chains. Are consumers pushing against high prices?

Last Friday they reported a strong quarter, which pushed the stock to new highs. Was already 19% for the year before Friday. It beat same-store sales, driven by Olive Garden and Longhorn Steakhouse. EPS also beat, and full-year forecast was solid. They announced share buybacks and raise the dividend to 2.7%. Average weekly deliveries nearly doubled the last 2 weeks of the quarter, thanks to a new program. But fine-dining sales declined. They plan expansion in places like Canada.

It reports Thursday. Normally, this is a buy, but restaurants have fallen out of favour. You can buy a little on Wednesday, then pounce after results if the stock falls. Is a consistent company that pays a good dividend.

Yesterday, they reported, then shares plunged 12% in the last two sessions. Results were really mixed with same-store sales up 4.7% and beat expectations. But inflation is shrinking margins, so earnings missed. Management still slightly raised their full-year forecast, leaving earnings guidance unchanged. A big problem is high beef prices, not helped by sky-high Brazillian beef tariffs. DRI keeps prices blow the inflation rate, though, which boosts traffic to their restaurants. Also, customers will pay more for quality. Their deal with Uber Direct allows delivery from their website to reach a young, affluent customer. Food inflation is making this business tough, but this is temporary and Darden is doing all the right things. Trades at a reasonable PE.