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Omar Venerio
Omar Venerio
Articles (1712) 

Thursday Morning Market Highlights

Markets in the green, shares of Darden jumps +5% on earnings results

U.S. markets

U.S. stocks were in the green on Thursday morning after market labor data which showed that 870,000 workers filed new unemployment claims, according to the U.S. Department of Labor. The Dow advanced 0.13% to 26,805, the S&P 500 index gained 0.26% to 3,245 and the Nasdaq Composite Index was up 0.52% to 10,686.

Gainers

• General Mills (NYSE:GIS) +2.1%

• Albemarle Corporation (NYSE:ALB) +1.1%

• The Procter & Gamble Company (NYSE:PG) +0.4%

• Walmart (NYSE:WMT) +0.6%

Losers

• Under Armour, Inc. (NYSE:UA) -5.5%

• Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH) +4.9%

• Twitter (NYSE:TWTR) -3.2%

• Edwards Lifesciences Corporation (NYSE:EW) -1%

Global Markets

The main European stock markets traded in the red. The UK's FTSE 100 slipped 1.27%, France's CAC 40 fell 0.80%, Germany's Dax was down 0.56% and Spain's Ibex 35 swelled 0.37%.

In Asia, Japan's Nikkei 225 fell 1.11%, India's BSE Sensex retreated 2.96%, Hong Kong's Hang Seng lost 1.82% and China's Shanghai Composite was down 1.72%.

Darden Restaurants releases earnings report

Shares of Darden Restaurants, Inc. (NYSE:DRI) gained 5.5% on Thursday morning after the company announced its first-quarter fiscal 2021 results. The company posted earnings per share of 56 cents, beating analysts' estimates by 51 cents. Revenue of $1.53 billion declined 28.2% year-over-year and fall short of expectations by $20 million.

Chairman and CEO Gene Lee had the following to say:

"The actions we continued to take in response to COVID-19, which include being laser-focused on execution and strengthening our business model, resulted in significantly improved first quarter performance that exceeded expectations…I'm incredibly proud of how our restaurant teams have adapted to our new operating environment and their ongoing dedication to safety and delivering exceptional guest experiences."

By segments, sales in Olive Garden were down 27.7% from same quarter of fiscal 2020, while sales in the the LongHorn Steakhouse segment also fell year-over-year. Fine Dining dropped 38.9%. Profits were also affected, as shown in the below table:

Q1 Sales

Q1 SegmentProfit

($ in millions)

2021

2020

% Change

2021

2020

% Change

Consolidated Darden

$1,527.4

$2,133.9

(28.2)

Olive Garden

$788.2

$1,090.2

(27.7)

$173.8

$228.9

(24.1)

LongHorn Steakhouse

$376.8

$450.2

(16.3)

$57.0

$74.5

(23.5)

Fine Dining

$83.1

$136.1

(38.9)

$9.9

$20.3

(51.2)

Other Business

$279.3

$457.4

(38.9)

$35.7

$64.4

(44.6)

Moreover, after suspending its dividend for May and August, the company's Board of Directors announced that it has reinstated a quarterly dividend and declared a quarterly cash dividend of 30 cents per share.

Looking ahead the second quarter, the company expects total sales to be about 82% of the prior year, with Ebitda of $200 million to $215 million and diluted net earnings per share from continuing operations in the range of 65 to 75 cents.

Joel Greenblatt (Trades, Portfolio) cut his investment in the stock by 12% to 29,364 shares in the second quarter of calendar 2020. George Soros (Trades, Portfolio) initiated a new position with 881,400 shares.

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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