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ovenerio
Omar Venerio
Articles (1681) 

Thursday Morning Market Highlights

Markets down, Darden reports quarterly results

US markets

U.S. stocks were in the red on Thursday amid another 1.48 million Americans filing for unemployment benefits. The Dow Jones Industrial Average fell 0.21% to 25,394, the S&P 500 index lost 0.23% to trade at 3,043 and the Nasdaq Composite Index was down 0.06% to 9,903.

Gainers

• Accenture plc (NYSE:ACN) +5.5%

• National Oilwell Varco, Inc. (NYSE:NOV) +4.3%

• Ameriprise Financial, Inc. (NYSE:AMP) +3.9%

Losers

• Ross Stores, Inc. (NASDAQ:ROST) -5%

• ViacomCBS Inc. (NASDAQ:VIAC) -4%

• Wynn Resorts, Limited (NASDAQ:WYNN) -4.7%

• PulteGroup, Inc. (NYSE:PHM) -4.5%

Global markets

The main European stock markets traded in the green. The UK's FTSE 100 gained 0.58%, France's CAC 40 advanced 1.31%, Germany's Dax was up 1.10% and Spain's Ibex 35 jumped 1.24%.

In Asia, Japan's Nikkei 225 slid 1.22%, India’s BSE Sensex fell 0.08%, Hong Kong's Hang Seng dipped 0.50% and China's Shanghai Composite was up 0.30%.

Darden Restaurants releases earnings report

Shares of Darden Restaurants, Inc. (NYSE:DRI) jumped almost 6% on Thursday morning after the company announced its fiscal fourth-quarter 2020 results. The company posted a loss of $1.24 per share, beating analysts’ estimates by 40 cents. Revenue of $1.27 billion declined 43.0% year-over-year and was in-line expectations.

CEO Gene Lee had the following to say:

"The strategy we put in place five years ago helped us successfully navigate one of the most challenging periods in our Company's history. When our dining rooms closed, our operators did an amazing job of reimagining the guest experience by staying true to our back-to-basics operating philosophy. We benefited greatly from our competitive advantages that form the foundation of our strategy, especially our scale and our culture. Our scale allowed us to quickly react to constant change, while our team members displayed tremendous innovation, flexibility and passion as they continued to serve our guests. I'm incredibly proud of our teams and that our culture grew stronger during this time.”

The decline in total sales was driven by negative blended same-restaurant sales of 47.7%. Same-restaurant sales by segment and brand declined by the following percentages:

▪ 39.2% for Olive Garden

▪ 45.3% for LongHorn Steakhouse

▪ 63.1% for the Fine Dining

▪ 62.5% for The Capital Grille

▪ 65.2% for Eddie V's

▪ 58.5% for Cheddar's Scratch Kitchen

▪ 70.7% for Yard House

▪ 69.9% for Seasons 52

▪ 66.1% for Bahama Breeze

▪ 65.4% for the Other Business

The total operating costs and expenses decreased 6.9% year-over-year to $1.86 billion due to a decrease in various costs such as food and beverage costs, restaurant expenses and labor costs.

The company had cash and cash equivalents of $763.3 million at quarter's end, down from $457.3 million at the end of May 2019.

Looking ahead the first quarter of fiscal 2021, the company expects total sales of approximately 70% compared to prior-year sales, with Ebitda of at least $75 million and diluted net earnings per share at least at the break-even point.

Paul Tudor Jones (Trades, Portfolio) cut his holding in the company by 61% to 4,211 shares. Steven Cohen (Trades, Portfolio) added 61% to its investment for a total of 782,742 shares. Philippe Laffont (Trades, Portfolio) and Ken Fisher sold out of the stock.

Disclosure: The author holds no positions in any stocks mentioned.

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About the author:

Omar Venerio
Omar Venerio is a capital markets, derivatives, corporate finance and financial management professor and Area Head of Finance. He is passionate about the stock market and providing independent fundamental research and hedge fund and insider trading-focused investigation.

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