Darden Restaurants Inc
DRI: XNYS (USA)
Morningstar Rating for Stocks | Fair Value | Economic Moat | Capital Allocation |
---|---|---|---|
$454.00 | Yxjpmth | Brwdljws |
Darden's Pricing Discipline Set to Drive Full-Service Share Gains, but Industry Headwinds Linger
Business Strategy and Outlook
As Darden Restaurants emerges from the COVID-19 pandemic, we expect its playbook to remain largely the same, with the restaurant operator leaning into scale-driven cost advantages, embracing datacentric decision-making, trying to attract and retain employees with a compelling culture, and providing a differentiated dining experience, consistent with management's back-to-basics strategy. While we view this approach as strategically sound, we expect any success at Darden to come in spite of, rather than propelled by, aggregate industry results, with the full-service industry posting anemic average annual sales growth (1%-2%) over the past decade, well behind limited-service peers' 3%-4% clip.