Darden Earnings: Slight Earnings Miss and Tightened Guidance Do Little to Alter Our Long-Term View

Narrow-moat Darden reported acceptable fiscal second quarter results, with net sales of $2.73 billion aligning with our estimate but with $1.84 in adjusted EPS falling well short of our $2.12 forecast. The firm narrowly missed consensus sales expectations, sending shares down 2%-3% after the release, but we expect few changes to our $11.5 billion and $8.37 GAAP EPS full-year estimates, which remain roughly in line with management's tiny downward revision to guidance (40 basis point lower sales growth and a 25-basis-point decline in comparable sales growth at the midpoints for fiscal 2024). We expect no meaningful change to our $146 intrinsic valuation, leaving shares trading at a slight premium.