Summary
Darden Restaurants has made a significant recovery from the 2014 lows.
The management has taken bold but effective decisions to drive this growth, and the company is approaching the future with a certain degree of stability around its financial performance.
Shares yield over 2.7% at the current market price, but investors need to be wary of industry-wide headwinds.
Investment thesis
Darden Restaurants (NYSE:DRI) is in a growth phase, and the company is continuing to streamline its operations with a view of improving its operational efficiency. Exemplary management initiatives have led the growth story so far, coupled with favorable industry dynamics. However, the industry is going through rapid changes, and these changes are posing new challenges to the future growth of Darden. Darden yields an attractive 2.7% at the current market price, but I believe expected headwinds will eat in to Darden’s profits in the future, which makes its shares pricey at the moment.
Company overview and business strategy
Darden is one of the largest players in the U.S. casual dining industry, and the company operates 03 core brands.
- Olive Garden
- LongHorn
- Cheddar’s Scratch Kitchen
Apart from its core brands, Darden operates several other smaller, specialty restaurants.
