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Q3 Rundown: Darden (NYSE:DRI) Vs Other Sit-Down Dining Stocks

StockStory - Wed Jan 17, 1:24AM CST

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Let's dig into the relative performance of Darden (NYSE:DRI) and its peers as we unravel the now-completed Q3 sit-down dining earnings season.

Sit-down restaurants offer a complete dining experience with table service. These establishments span various cuisines and are renowned for their warm hospitality and welcoming ambiance, making them perfect for family gatherings, special occasions, or simply unwinding. Their extensive menus range from appetizers to indulgent desserts and wines and cocktails. This space is extremely fragmented and competition includes everything from publicly-traded companies owning multiple chains to single-location mom-and-pop restaurants.

The 14 sit-down dining stocks we track reported a mixed Q3; on average, revenues missed analyst consensus estimates by 0.8% Stocks have faced challenges as investors prioritize near-term cash flows, but sit-down dining stocks held their ground better than others, with the share prices up 11.8% on average since the previous earnings results.

Darden (NYSE:DRI)

Started in 1968 as the famous seafood joint, Red Lobster, Darden (NYSE:DRI) is a leading American restaurant company that owns and operates a portfolio of popular restaurant brands.

Darden reported revenues of $2.73 billion, up 9.7% year on year, falling short of analyst expectations by 0.5%. It was a mixed quarter for the company, with a solid beat of analysts' gross margin estimates but full-year revenue guidance missing analysts' expectations.

"We continued to profitably grow market share again this quarter as we outperformed industry same-restaurant sales and traffic," said Darden President & CEO Rick Cardenas.

Darden Total Revenue

The stock is down 3.6% since the results and currently trades at $157.17.

Is now the time to buy Darden? Access our full analysis of the earnings results here, it's free.

Best Q3: First Watch (NASDAQ:FWRG)

Based on a nautical reference to the first work shift aboard a ship, First Watch (NASDAQ:FWRG) is a chain of breakfast and brunch restaurants whose menu is heavily-focused on eggs and griddle items such as pancakes.

First Watch reported revenues of $219.2 million, up 17.3% year on year, outperforming analyst expectations by 1.2%. It was a stunning quarter for the company, with an impressive beat of analysts' earnings estimates.

First Watch Total Revenue

The stock is up 14.2% since the results and currently trades at $19.09.

Is now the time to buy First Watch? Access our full analysis of the earnings results here, it's free.

Weakest Q3: The ONE Group (NASDAQ:STKS)

Doubling as a hospitality services provider for hotels and resorts, The One Group Hospitality (NASDAQ:STKS) is an upscale restaurant company that operates STK Steakhouse and Kona Grill.

The ONE Group reported revenues of $76.88 million, up 5.3% year on year, falling short of analyst expectations by 7.7%. It was a weak quarter for the company, with full-year revenue guidance missing analysts' expectations and a miss of analysts' revenue estimates.

The ONE Group had the weakest performance against analyst estimates and weakest full-year guidance update in the group. The stock is up 16.6% since the results and currently trades at $5.33.

Read our full analysis of The ONE Group's results here.

Kura Sushi (NASDAQ:KRUS)

Known for its conveyor belt that transports dishes to diners, Kura Sushi (NASDAQ:KRUS) is a chain of sushi restaurants serving traditional Japanese fare with a touch of modernity and technology.

Kura Sushi reported revenues of $51.48 million, up 30.9% year on year, in line with analyst expectations. It was a mixed quarter for the company, with an impressive beat of analysts' gross margin estimates but a miss of analysts' earnings estimates.

Kura Sushi delivered the fastest revenue growth and highest full-year guidance raise among its peers. The stock is up 20.1% since the results and currently trades at $89.34.

Read our full, actionable report on Kura Sushi here, it's free.

Texas Roadhouse (NASDAQ:TXRH)

With locations often featuring Western-inspired decor, Texas Roadhouse (NASDAQ:TXRH) is an American restaurant chain specializing in Southern-style cuisine and steaks.

Texas Roadhouse reported revenues of $1.12 billion, up 12.9% year on year, falling short of analyst expectations by 0.1%. It was a slower quarter for the company, with a miss of analysts' earnings estimates.

The stock is up 24.9% since the results and currently trades at $118.15.

Read our full, actionable report on Texas Roadhouse here, it's free.

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The author has no position in any of the stocks mentioned

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